Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: THURSDAY, December 9, 1993 TAG: 9312090124
SECTION: NATL/INTL PAGE: A-1 EDITION: METRO
SOURCE: Knight-Ridder/Tribune
DATELINE: WASHINGTON LENGTH: Medium
In what amounts to a reality check of the White House plan by a credible outside group, the health-care research and consulting firm Lewin-VHI found that the administration underestimated the cost of its benefits package.
About 45 percent of households would pay more for health care under Clinton's plan than they would otherwise, while the rest would pay less or about the same.
The report found that older Americans would save the most from health-care reform, while costs for some young adults would go up.
To the relief of administration officials, the Lewin report concluded that the bill would accomplish Clinton's central goal: universal coverage without stiff new taxes.
"The plan's financing structure works," said Lawrence Lewin, chairman of the company, whose expertise in health-care economics has been widely used by all sides in the debate over reform.
White House spokesman Bob Boorstin said: "We're really happy with this. Above all, it confirms that the act is fully financed, that the numbers are real and that it will reduce the deficit."
Nonetheless, the report is likely to provide fodder for both sides in the debate. Among its main conclusions:
The White House significantly low-balled the cost of Clinton's comprehensive benefits package. Lewin estimates that the package would cost $2,732 for individuals and $5,975 for a two-parent family in 1998 - the first year under which all Americans would be covered. The administration estimates that the benefits would cost $2,388 for an individual and $5,388 for a two-parent family.
About 26 percent of American households would pay at least $500 more for health care in 1998 under Clinton's plan than they would otherwise. Another 15 percent would pay at least $100 more. But 34 percent of households would save at least $500, while 14 percent more would save at least $100. Most of those paying more would be getting better benefits than they now have.
Employers would not start saving money on health-care costs until 2002, versus 1998 in administration projections. About 44 percent of companies that now provide coverage would pay at least $100 more per employee in 1998, 53 percent would pay at least $100 less, and 3 percent would see virtually no change. Clinton's plan would require all employers to provide coverage.
White House projections that Clinton's bill would cut the deficit by $58 billion from 1995 to 2000 are too optimistic. The Lewin report estimated that the bill would reduce the deficit by $25 billion but warned that slight changes in the rate of increase of health-care costs could wipe out any gains and result in more red ink for the government.
Lewin-VHI prepared the report independently, not for a particular client.
by CNB