The Incredible Shrinking Health Care Plan

If Washington's war over health-care reform seems nasty, brutish, and endless, be warned: You ain't seen nothin' yet. The battles are getting bloodier, and the final product is shrinking.

The Senate Finance Committee was supposed to be the place to pull together a bipartisan package for fixing the health system. But the panel's pre-July 4th political fireworks signal that a consensus bill is now out of the question. True, a rump group of six committee Republicans and Democrats hammered out a compromise, but that plan has little hope of attracting many more votes from either party. So the House and Senate are preparing for a steamy summer that will pit President Clinton's promise of guaranteed health-care coverage for all against GOP charges that "Hillary Care" will wreck the medical system for the 85% of Americans who already have insurance.

LAST HOPE. As the spirit of cooperation deteriorates, the odds grow that reform will be minimal. Rather than overhaul the $1 trillion health industry, lawmakers will narrow their focus to middle-class voters' fear of losing insurance. That problem can be solved largely through inexpensive changes that make insurance easier to buy and harder to lose. But such fixes won't make medical care more efficient or cheaper.

The Finance panel was the last hope for bipartisanship. Business leaders and Capitol Hill moderates had counted on its centrist members to balance Democrats' demands for universal coverage with Republicans' refusal to saddle employers with the tab. But the rump group--reflecting the rightward shift in public opinion--produced a plan that expands coverage by relying solely on insurance reforms and subsidies for the poor. Even if their coverage target--95% of the population by 2002--is missed, the compromise wouldn't force individuals to buy insurance, or employers to pay for it.

Trouble is, few are buying the deal. Dubbed Clinton Lite, it's too close to the original for the GOP but not filling enough for Democrats. Both Chairman Daniel P. Moynihan (D-N.Y.) and Senate Minority Leader Bob Dole (R-Kan.) undercut the compromise with their own, hardly more popular proposals.

Out of this chaos, the rump group's plan might emerge--but it won't survive long on the Senate floor. Majority Leader George J. Mitchell (D-Me.) will champion a far more sweeping bill by Senator Edward M. Kennedy (D-Mass.) that puts the insurance burden on employers immediately. Republicans will counter with a stripped-down set of insurance reforms: Dole's plan, offered June 29, would bar insurers from denying coverage to people with preexisting conditions and would require policy renewals.

House Republicans could be happy with Dole's bill--but might be even happier with nothing at all. One hardball tactic: play to voter fears that reform will cost more and deliver less. In a June 24 meeting with business lobbyists, House Minority Whip Newt Gingrich (R-Ga.) revealed GOP plans to give a sinister cast to Democratic efforts to merge massive plans from two committees. Gingrich will invite radio talk-show hosts--Clinton's harshest critics--to broadcast from outside "the secret room" where the closed-door talks take place. The GOP will be nearby to attack what Gingrich calls "an act of corruption." He'll also demand several days of hearings on the merged measure, eating up critical time before adjournment.

Faced with such guerrilla tactics, Clinton confronts a tough choice: Does he hold out for sweeping reform and risk getting nothing or cave in to the opposition and accept minimalist steps as a downpayment on health-care security? With GOP gains expected in Congress this fall, a face-saving retreat might be the best Clinton can hope for on his top priority.

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