President Clinton yesterday outlined plans for modest improvementsin health insurance, vastly cut back from the comprehensivenationwide health plan that failed to win approval in the lastCongress because it looked too much like a government-run system.
Abandoned were the three most controversial features of his 1993-94 plan: a requirement that all employers pay for health insurancefor their workers, a government ceiling on insurance premiumincreases, and a provision to set up a system of government-supervised supermarkets for private health insurance called'alliances' through which most Americans would buy their policies.
Instead, Clinton proposed a cluster of new rules that would makeit easier to buy and keep health insurance, particularly whenchanging jobs. Some of these concepts are already being pushed by avariety of Republicans on Capitol Hill as a way to help provideinsurance coverage for at least some of the 41 million Americans wholack it.
In addition, he proposed net savings of $127 billion from thegrowth of Medicare over the next seven years, including $28 billionalready outlined in his initial fiscal 1996 budget request lastwinter. The savings are intended to help cut the federal budgetdeficit and in part to hold down program costs; the action woulddefer the impending bankruptcy of Medicare's hospital trust fund fromthe year 2002 to 2005.
A small part of the savings from Medicare reductions would beplowed back into a new home health care program for the disabled.
Senate and House Republican budget plans call for reductions of$256 billion to $288 billion in Medicare spending over seven years, aprospect that Democrats had called 'too much, too quick.' Most of theClinton Medicare reductions would be in payments to hospitals andthere would be no increased charges for beneficiaries. He also wouldcut $54 billion from the growth of Medicaid over seven years, in partby imposing caps on the rise of federal per capita payments to thestates. The congressional GOP budget plans call for Medicaid cuts of$175 billion to $187 billion.
Clinton's latest proposals were made at a time when the growth ofhealth costs nationally has been slowing because of generally lowinflation and an increase in the number of people subscribing to low-cost managed health care plans. In 1990, national health spendingincreased 10.7 percent; by 1993 the figure was 7.8 percent and theestimate for 1994 is 6.1 percent.
Clinton's general insurance reform focuses on those who havetrouble buying health insurance at reasonable prices: the unemployedand their children, small businesses, those who have been sick.
One proposal would bar insurers from refusing to insure or renewpolicies for small firms because of the health status of thosecovered. The insurer could charge the firm more because of workers'health status, but extreme extra charges would be limited.
Insurers also would be limited in their right to refuse insurancecoverage for a preexisting condition. The first time a person gotinsurance the insurer could refuse for up to six months to paycharges for the treatment of a health condition that existed beforethe insurance was purchased. But after that, if the applicantswitched jobs and transferred to a different policy, no new six-month exclusion could be imposed. This 'portability' provision wouldease burdens for people switching jobs. But since many millions lackinsurance because they cannot afford it, this and the other Clintonprovisions would not necessarily reduce the number of uninsuredsubstantially.
Clinton also proposes a subsidy for up to six months to helppeople who lose their jobs keep their family health insurance whilethey look for work. The plan calls for allowing the self-employed afederal income tax deduction of 50 percent of their health insurancecosts. It stands at 25 percent now.
It also would allow small employers to join purchasingcooperatives to buy insurance, and would require insurers that sellpolicies to federal workers through the Federal Employees HealthBenefit Program to offer the same policies to small firms.
In Medicare, the president's plan would allow women to getmammograms without making any co-payments and provide money to givefamilies caring for an Alzheimer's disease patient some time off.
