WASHINGTON -- President Clinton's draft health care reform plan proposes to create a new class of tax-exempt borrowers -- hundreds of health care alliances that states would form to collect medical insurance premiums from the people and businesses in their regions.

The alliances would be authorized to issue tax-exempt debt for short-term cash flow needs. The plan also calls on states to set up guaranty funds that could issue tax-exempt bonds to pay doctors and hospitals if a health plan became insolvent.

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