Clinton's Plan: DOA?

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Others said the Roundtable's action was not so much a vote for Cooper as it was a political hit on Clinton. Even John Breaux, the Louisiana Senator who co-sponsored the Cooper bill, told TIME he had never spoken with anyone at the Roundtable about his bill. "I'd like to say it's the most critical thing that's happened so far in the health-care debate," said Breaux, "but I can't, because it's not true." Junior White House officials spread out to say, as one put it, that "we never intended to win this thing." A senior official, however, acknowledged that the Roundtable bid was a mistake. "It seems to me," he said, "we allowed this thing to be built up to more than it was."

More worrisome to White House officials are poll results that indicate many Americans who already have insurance are convinced they will pay more for the same, or worse, coverage under the Clinton plan -- results supported by new evidence concerning the plan's cost. The White House estimated last fall that the average premium for health insurance under its plan would be $1,800 for individuals and $4,200 for a typical family of four. But a study by the health-care consulting firm of Lewin-VHI that was hailed by the White House in December found the premiums would be $2,732 for individuals and $5,975 for an average family. Lewin economist John Sheils estimates that 44% of Americans will pay more for coverage -- and that 14.6% will pay $1,000 more. "Under the Clinton plan," he says, "you're either a big winner or a big loser."

The 17% increase in premium costs will require the government to spend $35 billion more than it estimated to subsidize small business over the next five years, and the premium hike will also force employers to spend 14% more than Clinton estimated. Moreover, Sheils notes, the subsidies themselves are more generous than they need to be. By 1998 subsidies will total $75 billion, while the current cost of uncompensated care is $16 billion. "You're spending $5 to save $1," says Sheils.

The recognition of the plan's hidden costs is one reason why the Clinton approach seemed to be coming apart last week. But another is that the President's plan hangs on a string of interlocking parts: if one piece is removed in the legislative process, the rest of the mechanisms are quickly overloaded and bound to fail. For example, Clinton aims to pay for universal coverage in part by restraining health-care inflation through premium caps. If he backs away from caps, as he did last week, though, controlling inflation will be harder. So would be paying for universal coverage.