Clinton May Inherit Controversial Oregon Health Plan : Policy: Bush is unlikely to act on request to ration Medicaid services. President-elect would face issue putting him at odds with his wife and Gore.

WASHINGTON — The Bush Administration is unlikely to act on Oregon’s controversial request to ration Medicaid services, sources said Tuesday, and may pass on to President-elect Bill Clinton the divisive issue--one on which he parts company with some of his closest advisers, including his wife and Vice President-elect Al Gore.

Its plan already turned down once by the Bush Administration, Oregon has retooled the proposal and resubmitted it for federal approval.

But top Administration health policy officials said this week that there does not appear to be enough time--or inclination--to take on the issue in the waning weeks of the Bush presidency.

“Whether we’ll have time to do it between now and Jan. 20 is debatable,” said Kevin Moley, deputy secretary of the Department of Health and Human Services.

Aside from timing, a top White House aide added: “There’s also the political consideration of whether something so inherently controversial should be done by this lame-duck Administration--either in its own interest or in the interest of setting policy for an incoming Administration. Since it’s so controversial, why not let them make the decision?”

First presented to the federal government more than two years ago, Oregon’s plan ranked 709 medical treatments according to their cost and benefit. Treatments deemed likely to improve quality of life generally were assigned higher priorities than those that do little more than prolong life. For instance, liver transplants for alcoholics had a much lower ranking than liver transplants for those who do not abuse alcohol.

Depending on the funds available, a cutoff line would be drawn somewhere on that list of treatments.

The issue could prove nettlesome for Clinton, if the Bush Administration leaves it for him to decide. As Arkansas governor and a presidential candidate, he strongly supported Oregon’s pioneering initiative, saying that states deserve broad latitude to initiate health care reforms, especially in light of past federal gridlock on the issue.

Once in office, however, Clinton will face a powerful array of conservative and liberal groups that strongly oppose the Oregon plan--including the Children’s Defense Fund, chaired for six years by his wife, Hillary, who remains a board member.

Gore, as a senator, testified last year in Congress against the plan, calling it “a horrible mistake” and an assault on “fundamental fairness and decency.”

How Clinton deals with such cross-currents seems likely to shed light on his operating style--and perhaps on Gore’s willingness to assert himself in the Clinton Administration.

At the same time, Clinton’s response to Oregon’s request also could provide a clue to how he would proceed with national health care reform as he seeks to fulfill a major campaign promise.

One top Clinton aide hinted this week that Clinton well could defer any action on the Oregon request until after hammering out a health care reform package for the nation.

Perhaps underscoring the dilemma that Clinton would be likely to face, Judith Feder, his assistant transition director for health care policy, refused to comment, saying only: “All upcoming policy decisions are under review.”

“This is a weird mix all around,” said a private health policy analyst who has monitored the Oregon controversy. “It reflects a lot of the complexities of health care reform in general. How this plays out--and how quickly--will have a lot to do with what Clinton does on overall reform.”

Oregon wants to extend Medicaid coverage to some 120,000 indigent residents who do not now qualify for Medicaid. But the state can afford to do so only by dramatically reducing the number of medical services already being provided under the program. Because Medicaid is a federal-state program, a proposed change in eligibility requires a federal “waiver.”

Many liberal groups, led by the Children’s Defense Fund, were outraged that Oregon’s plan would affect only the politically vulnerable--mostly indigent women and children. Gore, in his Sept. 16, 1991, testimony, said that the plan represented “a tragic choice and a horrible mistake in responding to the plight of the uninsured by developing a scheme that takes from the poor, and only the poor, to help the poor. . . . “

On the other hand, conservative organizations, such as the National Right to Life Committee, fought the plan because, they said, it “devalues” life by using a “quality of life” calculation to determine when a particular treatment is to be given or withheld.

The Bush Administration, in the face of harsh criticism that spanned the political spectrum, last August rejected Oregon’s request for a waiver, saying that its plan appeared to discriminate against the disabled under provisions of the 1990 Americans with Disabilities Act.

In resubmitting Oregon’s request last month, Gov. Barbara Roberts said that the new plan specifically addresses those concerns, which were most strongly expressed by civil rights attorneys in the Justice Department. For instance, Roberts said, Oregon has moved up in the rankings treatments for severely low birth weight babies and those with advanced cases of AIDS. And all liver transplants now are lumped into one treatment category--regardless of one’s alcohol consumption habits.

With the Oregon Legislative Emergency Board scheduled to meet on Friday to determine precisely where to draw the cutoff line on the new list of 688 treatments, state officials remained hopeful that the Bush Administration will grant the waiver.

“We don’t see any substantive reason for them not to move forward,” said a spokesman for Oregon Senate President John A. Kitzhaber, a physician and chief author of the rationing plan.

While there remains an outside chance that President Bush will act on the request, top Administration officials said that they are doubtful, especially given the rapidly dwindling amount of time left in his Administration, compounded by the approaching holidays and the growing number of policy-makers already departing from the agencies.

“We want to be very careful--and we might take more time than we have--to assure ourselves that all the objections over (the disabilities act) have been overcome,” said Moley, the deputy HHS secretary. “We’re mostly in the business of tying up loose ends.”