Clinton to Seek Medical Care for Children of Poor Families

The budget that President Clinton sends to Congress today will propose spending $3 billion a year to provide health insurance coverage to children from low-income families as well as to parents who are temporarily unemployed, sources said Wednesday.

The plan, which would implement Clinton’s pledge in his State of the Union address, calls for expanding medical coverage to 5 million uninsured children by the year 2000. It is the next installment in the administration’s strategy of reforming the health care system one step at a time.

The children’s health care initiative would extend coverage to only about half of the children who lack insurance. But the very modesty of its size gives it a greater chance of success in a Congress focused on balancing the budget rather than expanding services.

The proposal will be “alive on arrival” in the Congress, said a senior Republican House aide, because it addresses a widely perceived need to expand health care for children, but “let’s see the details,” the aide added.

The plan, which relies heavily on states and the private sector, revives a year-old administration proposal to extend health insurance coverage for six months to unemployed parents unable to afford insurance after they are laid off.

In addition, Health and Human Services Secretary Donna Shalala is proposing $750 million in “state partnership grants” for states to use to devise ways to provide health insurance for children whose families earn too much to qualify for Medicaid but too little to pay for insurance.

The children’s health plan appears to be one of the few new initiatives in the Clinton budget. The administration previously announced or leaked major provisions, including measures to reduce the growth of Medicare spending by $100 billion over five years, contain Medicaid spending for the poor and disabled and restore about $21 billion of welfare spending.

As part of his tax package, Clinton has proposed a $500-per-child tax credit for families with children up to age 12 that would be phased in, and a tax credit of up to $1,500 per year for two years of college and a tax deduction of up to $10,000 for post-high-school education and training.

Overall, Clinton’s budget provides his detailed plans for spending $1.7 trillion in the coming year, eliminating the deficit by the year 2002, averting a financial crisis in the Medicare program, beefing up spending for education and health care and providing nearly $100 billion of tax cuts over five years.

Sources said the administration was claiming enough savings from Medicare, Defense and other programs to produce a $17-billion surplus in 2002.