Debt and taxes: the hidden costs of ClintonCare.

• Author: Henderson, Rick

IF YOU THOUGHT THE SAVINGS-AND-loan bailout was a whopper, just wait. Inside the bowels of President Clinton's Health Security Act is a debt-creation scheme that could make S&L looters look like pikers.

Under the bill, individual health plans that get into financial trouble--say, by offering overly generous benefits--could stave off cash shortages by rationing care or by borrowing from the state, which would raise the money by taxing financially sound plans within the same regional health alliance. If an entire alliance runs out of money, Title IX, Subsection C allows it to borrow from the federal government. Such loans are permitted for shortfalls that result from an "estimation discrepancy," "an administrative error," or "the relative timing during the year in which amounts are received and payments are required to be made."

An alliance is supposed to repay its loans by increasing premiums or by getting more money from the state--in other words, by raising taxes. The secretary of the treasury can also unilaterally impose a payroll tax on members of the alliance to cover outstanding loans.

But...