
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: MONDAY, October 25, 1993                   TAG: 9310250057
SECTION: NATIONAL/INTERNATIONAL                    PAGE: A-1   EDITION: METRO 
SOURCE: The Washington Post
DATELINE: WASHINGTON                                LENGTH: Medium

HEALTH PLAN CHANGES DROP STATES' POWERS, HELP MORE BUSINESSES

President Clinton and his top health advisers have decided against giving states, in his health care reform plan, the power to limit the number of doctor groups or private companies that could sell health coverage to consumers or to automatically exclude high-priced health plans.

The latest version of the plan also would increase the number of small, low-wage firms eligible for federal subsidies to help them pay their share of their employees' health care - at an additional cost to the federal government of $2.5 billion over five years.

The changes in the states' abilities to regulate coverage follow criticism on Capitol Hill, from consumer groups and the American Medical Association that Clinton's plan would give the government too much power to control what health plans consumers could pick from and how much the plans could charge for their services.

"The criticism was that the alliances," the bodies the Clinton planners have devised to sell the coverage packages to consumers, "were too bureaucratic," said a top White House health adviser. "We think they were right."

Much of the criticism focused on the power of the health alliances. Under the plan, states would run the alliances and decide how many would exist within their boundaries. The alliances would pool the purchasing power of consumers and negotiate for lower prices.

Under the administration's proposal, an alliance would have been allowed to refuse to offer a health plan to its consumer members if that plan charged more than 20 percent above the average price of all other plans in a region.

An alliance would also have been able to limit to three the number of traditional fee-for-service health plans it offered consumers.

Now administration health care planners have decided that there will be no limit on the number of fee-for-service plans that could operate in the geographic area served by an alliance. Although states could still exclude plans that charge more than 20 percent of the average, they would have to do so without invoking a federal health care rule.

by CNB