WASHINGTON - Health care alliances and state guaranty funds generally would be prevented from using tax-exempt bonds under President Clinton's health care reform legislation because they would perform what traditionally have been private functions, according to a draft explanation of the bill.

"It is inappropriate to provide the indirect federal subsidy implicit in tax-exempt bonds to the individuals who benefit from the alliances and guaranty funds," administration officials said in the draft document which explains provisions of the proposed Clinton reform bill that was sent to Congress in late October.

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