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Clinton Sets 1998 Health Care Reform Enactment Deadline

By Dana Priest
The Washington Post


President Clinton has set a 1998 deadline for full implementaion of his health care reform plan and has retreated from the idea of short-term price controls, even voluntary ones, on the health industry in the meantime, according to White House officials.

That decision means that, under the administration proposal, all citizens and legal residents would have health insurance by the end of 1997.

While most of the costs of that "universal coverage" would be borne by employers and employees, the president also is finalizing details of a subsidy system to help low-wage workers in small firms pay for their health coverage. That provision could cost the federal government as much as $70 billion a year. Aides say most of the funds could come from redirecting funds in existing federal and state health programs.

Those and other key decisions were made Tuesday night in the first of three scheduled high-level meetings among the president,Cabinet members and top health advisers. Those meetings will determine the final shape of the plan Clinton will present to a joint session of Congress later this month.

The plan, which will offer hundreds of changes in the way the nations's patchwork health care system currently operates, will be debated and voted upon in Congress, where there is no clear consensus on either the degree of the health care problem or how best to solve it.

Already the outlines of the administration plan, much of which has been made public over the last several months, have been criticized in some quarters as too ambitious and expensive and in others as too modest. Nonetheless, several large interest groups --including organized labor, senior citizens, many private business coalitions, and health insurers and physicians -- support many of the structural elements of the plan.

Among the major decisions Clinton made Tuesday night:

--The administration will drop the idea of mandatory short-term price controls on the health care industry and will not advocate voluntary price controls backed up by some federal enforcement mechanism if voluntary measures were to fail. Instead, Clinton will urge the industry to restrain inflation voluntarily, as some segments of the industry have done in the last year, and will propose some type of government monitoring "to prevent profiteering," as one adviser put it, between now and 1995, when the plan would begin to go into effect.

-- The only general tax proposed by the administration will be a"sin tax" on cigarettes and, probably, on hard liquor; it will forgo any tax on beer and wine. Clinton is leaning toward a new taxon cigarettes of 50 to 75 cents a pack, said aides. Advisers have laid out revenue scenarios that go as high as $2 a pack.

White House aides said Wednesday that the president intends to complete his package by Friday and to begin a round of consultations with Congress and interest groups next week. Aides left open the possibility that Clinton would modify his proposal after hearing from these groups.

"He's taking a very different approach than what he did on the budget," said an administration official.

Clinton's twin goals in health reform have been to achieve universal coverage and to control escalating health care costs. To that end, he will call for ceilings on total federal health spending and will propose various kinds of limits on Medicaid and Medicare spending beginning in fiscal 1996. For the private sector,he will propose capping the amount that health premiums can rise each year.

Under the administration plan, premiums would eventually be limited to the same rate as the annual growth in the gross domestic product. Each state would have to enforce these limits by 1997, or sooner if the state implemented the full program sooner.