Better Hold Onto Your Wallets

By Janice Castro

As President Bill Clinton's health-care reform plan takes shape, two things have become clear: everyone will be covered, and everyone with a job could pay more. If his plan passes, those 37 million Americans who have no insurance -- more than half of them small-business employees and their families -- will be covered. No one will lose insurance simply because they have a medical problem. The new benefits will be "portable," which means that when someone changes jobs, or is between jobs, the coverage will continue. The poor will get about the same coverage as the rich. People will not go without medical care simply because they are unable to pay high doctor fees. Elderly Americans who are partly disabled by disease will have some coverage for home health care.

The trouble is, by solving just about everyone's problems, the White House has come up with a plan so generous that it is going to be enormously expensive. Most Americans who already enjoy medical coverage may discover that they will have fewer choices than they have and less control over how they seek medical care.

Will they be able, for example, to choose their own doctor? The White House says yes. Well, sort of. Under the Clinton plan, Americans will join large insurance pools and will be able to choose among several different types of health plans, depending on how big a share of the costs of care they are willing to pay. Some will join health-maintenance organizations, which treat patients for a flat fee. Others will sign up with a group of doctors and hospitals. Most people will be able to choose among the doctors working for the plans, but that does not mean everybody will be able to continue seeing the doctors they know.

For those who currently have no family doctor, this approach is an improvement. But the majority, who may want to stick with their present doctors, will have to wait and see. Since the plan may give states great flexibility in designing local health plans, some states could allow citizens who want to remain with their family doctor to pay a little more to do so if that physician is not signed up with the local health plan. But other states may limit the choice to the doctors in the designated health plan.

The basic benefits package guaranteed to all Americans will be more generous than most people's current coverage. It will probably cover mental health, dental benefits, hospitalization, outpatient care, doctor visits, annual checkups, prescription drugs, prenatal care, preventive medicine such as mammograms and more. While the details are still somewhat vague, most patients are likely to pay a low fee for each service, while the health plan picks up the balance. All medical care will be budgeted; then doctors and other providers can determine prices to make the budget work.

Most people will pay more for coverage than they do now, in part through new taxes and fees, and much of that money will go to provide care for less fortunate Americans. Luxury care will become very rare, since almost no coverage will pay for it. Nearly all doctors will probably be salaried employees of plans, and the rest will operate under a government-imposed fee schedule. As more family doctors and clinics spring up in neglected rural areas and scruffy urban neighborhoods, many Americans will find basic medical care readily available for the first time.

The health-insurance pools will manage their budgets closely. Health administrators will discourage visits to the doctor when the complaint is something minor like the flu or a bad cold. Doctors will face more second- guessing by health-plan bureaucrats regarding their decisions on how to care for patients. For these reasons, the more than 200 million middle-class Americans who already enjoy full medical coverage may feel the plan is both too extravagant in its reach and uncomfortably restrictive to use, especially when they find out how many new taxes they are going to have to pay to finance it for themselves and everyone else.

Patrick Hobart, 62, just retired from his job as an appliance salesman in Seal Beach, California. Says he: "I think that Clinton has a wonderful idea, but I don't think it's realistic. I mean, who is going to pay for it?"

The answer is basically everyone, but especially middle-class and upper- income Americans. The President is considering requiring companies to divert health premiums to the insurance pools; taxes on some company benefits; levies on wine, liquor and cigarettes; and other taxes.

Workers at many small companies may be relieved that they will finally get ! first-class medical coverage, but not when they find out that some of them will probably lose their jobs as a result of the requirements. For many small businesses, the new costs alone may be greater than annual profits. If the Federal Government requires mom-and-pop shops, retail stores and restaurants to provide extravagant benefits to every dishwasher and waiter and clerk, those firms may cut staff, or ask workers to take pay cuts.

Terri Healy, who owns an exercise studio in La Jolla, California, is reluctantly planning her strategy for dealing with the Clinton health plan. While she does not provide medical benefits, she does give her 42 employees cash contributions toward their coverage. If the Clinton plan is enacted, Healy says she will slash working hours so that many of her employees will not meet the minimum required to qualify for the new benefits. Paula Brown, president of JB Chemical in North Las Vegas, Nevada, employs 17 people and says the burden of providing such coverage would be ruinous. She explains, "My obligation is to make sure I'm solvent, so I can service my customers and pay my staff. As a business person, I'm going to do whatever it takes to accomplish those goals."

At least one large group of Americans clearly will benefit immeasurably from the plan. Medicaid, the much criticized federal system responsible for providing coverage to the poorest citizens, will gradually be folded into the new health-care system. Once it is, millions of impoverished Americans will enjoy better care and greater access to doctors. That alone would be an accomplishment the White House reformers could point to with pride.

With reporting by Michael Duffy and Dick Thompson/Washington, with other bureaus