Agency analysts zeroed in on Mr. Clinton's proposal that all employers and workers pay insurance premiums to regional "health alliances," which would act as "agents of the federal government" and negotiate coverage with insurers. Given these and other elements of the plan, the agency concluded that it "would establish both a federal entitlement to health benefits and a system of mandatory payments to finance those benefits that represents an exercise of sovereign power."
The agency also disputed White House claims that its health plan would reduce the federal budget deficit, concluding that the plan would instead drive up the deficit in the first six years.
Worried White House officials discounted the damage caused by the long-awaited CBO report and played up the agency's conclusion that the president's plan could achieve coverage of all Americans without bankrupting the government.
The budget office's report will carry great weight in the debate over health reform and could help alternative plans that are less governmental, such as one proposed by Rep. Jim Cooper, a Tennessee Democrat. Because the Congressional Budget Office is nonpartisan and highly respected, lawmakers of both parties eagerly awaited the results of its study of the Clinton health plan.
Critics such as Rep. Bill Archer, a Texas Republican, seized on the report as proof that the president's plan "is not a market-driven solution," as Mr. Clinton has insisted. "It is a massive intervention by the federal government," Mr. Archer said.
Rep. Newt Gingrich of Georgia, the House minority whip, said the report was a death knell for the Clinton plan. "Congress has now got to get together and produce a common-sense approach," blending plans proposed by Mr. Cooper with Republican ideas on market reforms.
The report follows criticism of the president's proposal from leading business groups, including the National Association of Manufacturers, the U.S. Chamber of Commerce and the Business Roundtable, which charged that the plan was too costly and bureaucratic.
In its study, the congressional agency stopped short of classifying the Clinton plan's premium payments as taxes, as some Republicans have labeled them.
The report increases the likelihood that the health alliances proposed by the president will be stripped of most of their regulatory powers and perhaps transformed into voluntary insurance purchasing organizations for the benefit of small businesses. Even before yesterday's report, many Democrats sympathetic to the president's reform goals had predicted that the alliances would be significantly changed.
But compulsory participation in alliances is a fundamental part of the president's plan for guaranteeing health insurance for all Americans by 1998. Mr. Clinton would have employers pay 80 percent of premiums, with workers paying 20 percent. The government would subsidize coverage of poor people and small businesses with low-wage employees. Medicare would remain a separate program for the elderly.
The president has promised to be flexible, so long as the goal of universal coverage is met, but has not said how he might change his plan.
Mr. Clinton dismissed the CBO report when asked about it in Louisiana, where he was selling his health plan to workers at a General Motors Corp. truck plant. "That's not a problem," he said of the agency's conclusion that his health plan belongs in the federal budget. "No serious person out here in the real world will be too troubled by that."
Source : http://articles.baltimoresun.com/1994-02-09/news/1994040025_1_budget-office-plan-clinton-health571