Question: What does the coming health reform debate have in common with dog breeding? Answer: Plenty. President Clinton's plan to provide universal health insurance coverage is about to encounter other breeds on Capitol Hill. Senate Republicans have proposed another big plan to provide universal coverage but through means radically different from Clinton's. Tennessee Democratic Rep. Jim Cooper has a smaller-scale plan popular with centrist Democrats and Republicans. A few other lawmakers are strutting around with smaller versions yet -- plans that would make comparatively modest reforms and enable more Americans to buy and keep broad private health coverage. Somehow or other, these different breeds will mate over the next few months. And if a final health reform plan is born later this year, one strange-looking mutt will surely result.
A reform bill is scheduled to go to the floor of the House of Representatives for debate by the end of May, with Senate action to follow. The White House wants a final bill ready for the president's signature by the end of July, but there is a good chance the final vote could take place just weeks -- or even days -- before congressional elections in November.
Nobody expects any of the six major competing reform plans, including Clinton's, to survive this process intact. Nonetheless, in the Democratic-controlled Congress, the president's package is the starting point; the question is how it will be reshaped along the way. "We plan to do nothing for the next six weeks but sit in a room and talk about the president's bill," says Democratic Rep. Jim McDermott of Washington, a member of a key House Ways and Means health subcommittee and sponsor of a rival plan to provide everybody with Canadian-style, taxpayer-funded public health insurance. In fact, even though more than 90 House Democrats have endorsed this "single payer" plan, McDermott and his Senate co- sponsor, Minnesota Democrat Paul Wellstone, admit that their best hope now is to amend the Clinton plan in several key ways. Among them: expanding the president's proposed benefits package to include broader mental health coverage and assuring that patients will be able topick their own doctors freely without incurring any financial hardship.
Clinton insists that he is flexible on reform's details, aside from his demand for universal coverage. Yet when Congress begins tinkering with its pieces, the whole structure could collapse -- and it's not clear that lawmakers could agree on an alternative. Here are the three biggest issues at the heart of the struggle and how the competing plans deal with them:
Universal coverage. A top concern is whether -- and when -- health reform should provide health insurance for virtually every American. At any given time, some 15 percent of the U.S. population -- about 38 million people -- is now without insurance. Clinton's plan is designed to insure all but about 2 percent of Americans by 1998. The key exception: States would be allowed to find ways to pay the health expenses of the homeless and of migrant workers other than by giving them insurance packages.
Nearly all Clinton's competitors proclaim the importance of universal coverage as a long-term goal. But, in fact, the camps are split between those who simply want to make private health coverage more affordable and accessible for more people and those who want ironclad guarantees and definite sources of funding to ensure that almost everyone will have health insurance. In general, those in the first camp include the plan sponsored by Representative Cooper and a House Republican proposal introduced by Minority Leader Robert Michel of Illinois. Those in the second camp include Clinton, the single-payer advocates and Republican Sen. Don Nickles of Oklahoma, whose plan would close the loophole in the tax code that makes health insurance a nontaxable benefit and use the savings to channel tax credits to individuals in order todefray coverage costs. Somewhere in the middle lies the plan endorsed by Republican Sen. John Chafee of Rhode Island, which proposes redeploying huge savings from the two major government health programs, Medicare and Medicaid, to gradually extend coverage to virtually all Americans by 2005 -- but only if those savings actually materialize.
Among those in the first camp, the plan sponsored by Representative Cooper and his Senate colleague, Democrat John Breaux of Louisiana, takes the concept of health care accessibility the furthest. Like most other reform plans, Democratic and Republican, theirs would rewrite insurance laws to ban practices like denying coverage to people with pre-existing medical conditions. New insurance purchasing pools known as "health alliances" would be set up so that the jobless, the self- employed and small businesses and their workers could obtain coverage at the discounted rates available to larger firms.
But unlike the Clinton plan, theirs does not require companies to contribute to covering their workers. Instead, Cooper's plan would pay for insuring all the poor; allow those who buy coverage for themselves to take tax deductions of 100 percent of premiums, and subsidize coverage for people earning up to 200 percent of the poverty level, or about $29,530 in today's terms. The bottom line is that the plan would probably extend coverage to at least 20 million more Americans, leaving perhaps an additional 20 million without assured coverage.
Cooper says he agrees with Clinton that universal coverage is important. But he argues for getting as much as possible out of pro-competitive changes in the insurance market before enacting the president's more draconian reforms. "Universal coverage isn't like a light switch; it's like a dimmer switch that you turn on slowly," Cooper says. "Our bill is 80 percent bright, without blowing any fuses." All the same, he's now negotiating with Clinton on a compromise to achieve something closer to universal coverage than his own plan realizes. One possibility is to postpone the president's timetable for universal coverage by a few years so that reform costs less upfront. That's the strategy behind Chafee's plan for getting to universal coverage by 2005. But setting a target date so long after Clinton leaves office could be politically risky for the president, since it would be seen as an empty promise. Then there's the grim lesson of Massachusetts, which passed a phased-in universal plan under then Gov. Michael Dukakis in the late 1980s -- only to see it scuttled amid the state's fiscal crisis several years later.
Paying for reform. Getting universal coverage depends on two key questions: How much money is Congress willing to raise, and how do lawmakers propose to collect it? Clinton's answer is to muster $409 billion from 1995 to 2000 largely through savings in government health programs and higher taxes on tobacco. But another chunk of money for his plan would come from employers, who overall would pay about 7 percent more than they are currently projected to spend on employee health benefits from 1995 to 2000, according to an analysis by Lewin-VHI, a health- policy consulting firm. What's more, Clinton's plan, along with Cooper's and Chafee's, embraces an insurance-pricing system known as "community rating," in which everyone in a geographic area pays the same rates for health insurance. In effect, this means that employers and workers would heavily subsidize the coverage of nonworkers, who tend to be older and sicker than the rest of the population.
Other reform plans like Cooper's and Chafee's mimic Clinton's in proposing to use savings from government health programs to help fund broader coverage. But they reject on political and ideological grounds his requirement that companies pay for their workers. Chafee's Senate Republican Task Force plan substitutes an "individual mandate" -- a requirement that by 2005, all American citizens obtain health coverage much as drivers are required to have auto insurance. Like Cooper's plan, Chafee's would allow people who paid f
