Clinton Health Plan Will Hike Premiums for Many : Insurance: Shalala tells senators that most of those paying more will get improved benefits in return.

WASHINGTON —  Forty percent of American families who now have health insurance--at least 71 million people--will pay higher premiums if President Clinton’s health care proposal is enacted, the Administration estimated Thursday.

Health and Human Services Secretary Donna Shalala said in testimony before the Senate Finance Committee that most of those paying higher premiums, about 40 million people, would receive more generous health benefits in return.

But Finance Committee Chairman Daniel Patrick Moynihan (D-N.Y.), warned her that higher costs, even for those receiving better health coverage in return for their additional premium dollars, could be a hard sell.

“We’re going to have to persuade some of those that they’re going to get more and others that, on balance, it’s their civic duty,” he said, adding that Congress has not been particularly successful in selling such concepts in the past and that failure to do so now could doom the reforms.

Senate Minority Leader Bob Dole (R-Kan.) immediately pounced on the new figures as evidence that Clinton has oversold his plan.

“We need to stop all the hype,” Dole said in a speech on the Senate floor. “This is going to upset people . . . because they have been led to believe, or a lot of people have, (that) everybody is going to be better off, it is not going to cost any more, we are going to get better benefits for it.”

Contrary to Dole’s comments, the Administration has never claimed that everyone would see immediate savings from the plan.

Indeed, the estimates that Shalala provided Thursday were only slightly higher than figures quoted in earlier testimony by First Lady Hillary Rodham Clinton, head of the Administration’s health care task force.

However, coming only a day after the President introduced the 1,300-page plan during a splashy ceremony in the Capitol, some found the numbers jolting.

“For political purposes, it’s a bit of a bombshell. It’s at least a hand grenade,” said a senior Democratic congressional aide.

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Under Health and Human Services Department estimates, Shalala said that while 40% of families would pay more, 52% of families with insurance would pay less for premiums than they do now and about 7% would pay the same.

The department also estimated that about 4.2% would pay $500 to $1,000 a year in additional premiums, 17.6% would pay between $250 and $500 more, while the insurance costs of 18.6% would rise by less than $250.

Shalala conceded that the uninsured inevitably would pay more in premiums because they pay none at all now. But she suggested that many might pay less for insurance than they do for medical care without it.

The Administration earlier had estimated that the typical insurance payment would amount to $73 a month for a two-parent family with two children, $65 a month for single-parent families, $64 a month for a childless couple and $32 a month for single people.

Deputy HHS Secretary Kenneth Thorpe said in an interview that the initial cost estimates do not take into account the ultimate savings that the Administration expects its plan to yield--savings that would be passed on to health care consumers.

As the plan begins to bring health care costs under control, he said, the number of Americans paying less for health insurance than they did before would also rise.

However, one key Democratic congressional aide said that argument “requires a little religious belief. There’s a leap of faith involved if you are one of the 40%.”

Moynihan also raised questions about the size of the bureaucracy that would be created under the Administration’s health care plan--in particular, the proposed National Health Board that would administer much of the program.

Noting that Shalala had referred to it in earlier testimony as “a relatively minor oversight group,” he produced an internal HHS memo, prepared in September, showing it initially would have a $2-billion-a-year budget, an in-house staff of about 100 people and the ability to contract much of its work outside the agency.

“The word ‘minor’ was an inappropriate word,” Shalala said. “I was talking about a small staff on the national board.”

The memorandum, a copy of which was obtained by The Times, also indicated that the administrative costs of getting the health care program into operation would be $11.5 billion over the first five years.

Meanwhile, the President and Hillary Clinton launched their personal sales effort on behalf of the plan, which he formally presented to Congress on Wednesday.

In a speech in Baltimore, the President warned that his proposal for reforming the health care system cannot succeed unless Americans abandon a host of self-destructive behaviors.

Clinton cited teen-age pregnancy, poor nutrition and the “rising tide of violence” in U.S. cities as factors that not only destroy lives but also add immeasurably to the cost of providing health care.

In a joint appearance with his wife at Johns Hopkins University, Clinton grew animated as he said: “We have certain group behaviors in this country that are imposing intolerable burdens on the health care system.”

Among them he cited drive-by shootings that send children to hospital emergency rooms.

“It is a human tragedy. It is also the dumbest thing we can permit to continue to go on for our long-term economic health,” Clinton said, his voice rising. “Why do we continue to permit this to happen?”

Also on Thursday, the President’s plan won the tentative endorsements of a wide variety of consumer groups, whose combined memberships total 55 million people.

Among the groups was the powerful American Assn. of Retired Persons, whose president said that the group is “delighted” by Clinton’s determination to enact comprehensive reform.

Lovola Burgess also said Clinton’s plan should serve as “the starting point” in the coming debate.

Others who joined Burgess at a press conference were officials representing the American Nurses Assn., the American College of Physicians, Families USA, the Catholic Health Assn., the Service Employees Union and Chrysler Corp.

They agreed that modifications will--and probably should--be made in Clinton’s proposals, but they nonetheless expressed their support for the plan.

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Times staff writer Edwin Chen contributed to this story.