WASHINGTON -- A key member of Congress yesterday challenged President Bill Clinton's decision to give the states a leading role in his national health-care reform plan.

"I don't believe states should be given primary responsibility to enact, implement, and enforce the provisions of the national plan," said Rep. Pete Stark, D-calif., the chairman of the House Ways and Means Committee's subcommittee on health, which has jurisdiction over most of the health plan.

The National Governors' Association and most individual governors have applauded the Clinton plan because it would allow each state to decide how to implement its universal health-care mandate. Some small states could choose, for example, to take over the provision of all health services within their borders, while larger states might set up several quasi-governmental agencies or health alliances to manage health services within different regions.

The tax-exempt borrowing provisions of the Clinton plan also are tied to state control, since the health alliances would derive their tax-exempt borrowing status from being organized either as state agencies or nonprofit corporations. Also, the plan calls on all 50 states to set up health provider insurance funds that would have borrowing powers.

But Stark, at the first congressional hearing on the plan featuring First Lady Hillary Rodman Clinton, questioned the wisdom of giving so much control to the states.

"My governor, Pete Wilson, has already issued a press release to announce that the President's plan is unnecessary. This is despite the fact that six million Californians have no health insurance and California ranks second among the states in total per capita health spending," Stark said.

"It seems foolhardy to ask my constituents to put their health security in the hands of a governor who appears to have no desire or commitment to carry out President Clinton's plan," he said.

Committee Chairman Dan Rostenkowski, D-111., by contrast, expressed no position on state control in his opening statement on the massive and complex health reform initiative.

Like Stark, however, Rostenkowski said he is pledging the committee only to acting on a health reform plan that meets six broad principles laid out by the President, implying that it may not contain all the details of the Clinton plan. He and Hillary Clinton said the plan should pass by the end of next year.

Rostenkowski congratulated the Clintons for "changing the debate from whether we should have reform to what type of reform it should be."

The six principles that Rostenkowski listed were health security for all Americans, savings in both private and public medical bills, preserving quality of care, simplifying the health system, retaining freedom to choose doctors, and giving each individual and business some responsibility for health care.

Like Rostenkowski, House Energy and Commerce Committee Chairman John Dingell, D-Mich., whose committee also is charged with acting on the health plan, was silent yesterday on the role of states when his panel held a separate hearing on the administration's plan.

But Senate minority leader Robert Dole, D-Kan., has challenged the Clinton plan, suggesting that having 50 different state systems would present a nightmare for large businesses.

"What about the employer who has employees in 19 states? He's going to have a different bureaucracy to deal with in each state," Dole quipped during a television interview.

However, Sen. John D. Rockefeller 4th, D-W.VA., a leading Senate advocate of the Clinton plan, said Dole was "flat wrong" that the plan would create a massive amount of new state bureaucracy. Instead, the new state system is intended to largely replace the patchwork quilt of private insurance company bureaucracies that businesses now have to deal with, he said.

Many members of Congress who oppose a state-oriented system like Clinton's are in favor of a centralized national health system on the Canadian model. The principal sponsor of such a centralized plan, Rep. James A. McDermott, D-Wash., said yesterday that he now has 89 House co-sponsors, including more than a third of the House Democratic Caucus.

McDermott contended that the centralized plan would provide universal coverage and cut costs far more efficiently than the Clinton plan would.

"Our plan achieves $70 billion in administrative savings now consumed by overhead and profit by private insurance companies," he said. "By protecting the big insurance companies, the President's plan keeps that waste in the system."

McDermott said his plan also "does not rely on the very thing -- market competition -- which has failed to control costs in the past."

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