Ready to Operate

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The boldest of these proposals would cut in half the runaway rate of growth in spending on the two largest federal health-care programs. Clinton would cut spending on the Medicaid program for the poor by $114 billion over five years. And he would cut the Medicare program for the elderly and disabled by a whopping $124 billion, mainly by slowing inflation of payments to doctors and hospitals. These care providers would not be able to shift costs to non- Medicare patients, as they do now, because of new federal cost controls.

As Congress and special-interest groups began kicking Clinton's plan around last week, its political strengths and vulnerabilities began to emerge. Among the President's allies are the major lobbies for the elderly, who like the new benefits for drugs and long-term care. Says John Rother, legislative director for the American Association of Retired Persons: "There are people with a lot at stake who will try to derail this plan: the insurance industry, the National Federation of Independent Business." The small-business lobby, led by the NFIB, has targeted the plan's requirement that all employers pay at least 3.5% of payroll for health insurance. Most small businesses that don't offer health insurance "just cannot afford to do so," even with the subsidies proposed in the Clinton plan, contends FBI spokesman Terry Hill.

At the same time, Clinton's proposed cuts in Medicare and Medicaid are drawing fire from liberals. And some health experts think Clinton may be going too far. "No one can tell you with any assurance that these levels of cuts will not affect patients," says Stuart Altman, an economist at Brandeis University.

Republicans and conservative Democrats criticize Clinton's proposed caps on insurance premiums as a back-door version of oppressive government price controls. Says Lawrence English, president of the health-care division of Cigna, a major insurer: "I was initially encouraged to hear them say they were rejecting price controls. So I have a hard time understanding how that squares with the notion of caps on insurance premiums."

California, Texas and other states with large populations of illegal aliens will not be pleased with the plan's exclusion of illegals from guaranteed coverage. Those states would have to continue to cover the unpaid medical bills of illegals who seek treatment at hospital emergency rooms -- and with less federal aid for such care.

Others think Clinton is replacing one mess with another. Congressman Stark of California faults the President's plan as "amazingly complex. It creates many new bureaucracies. It is confusing. It eliminates traditional fee-for- service medicine as we know it."

Politicians and lobbyists are keenly aware of polls that reflect little public trust in Clinton's attempt to reform health care. In a Time/CNN survey conducted last week, only 15% of those polled had "a lot of confidence" in Clinton's ability to reform the health-care system, while twice as many expressed "no confidence" and 52% had "only some." Asked what effect Clinton's reforms would have on the quality of health care, only 19% said it would "get better," while 35% expected it would "get worse" and 41% predicted "no effect." A majority, 56%, expect that reform will increase the cost of their medical care.