Panel to Take Up Democrats’ Health Bill : Legislation: Senate plan would require employers to either pay for insurance or help finance a federal program. It faces GOP opposition.

Senate Democrats said Wednesday that they plan to begin work next week on sweeping “pay-or-play” health care legislation, despite the prospect of vigorous opposition by the White House and congressional Republicans.

The Senate Labor and Human Resources Committee is scheduled to take up legislation Wednesday that would extend health insurance to all Americans by requiring employers to provide private coverage for all workers or else pay higher taxes to finance an alternative federal program.

Approval of the package, which is expected to come on a party-line vote, would mark the first legislative salvo in the mounting battle over health care, which already has become a major issue in the 1992 election campaign. The issue has gained importance as health insurance costs have soared and layoffs of workers have mounted, leaving them without medical benefits. Some 35 million Americans have no health insurance.

Still uncertain is whether Democrats on the panel will be able to win the backing of Sen. Orrin G. Hatch (R-Utah), the committee’s ranking minority member, and other Republicans.

The pay-or-play measure is certain to be contentious. The White House already has served notice that it will oppose the legislation aggressively. Just last week, senior Administration officials blasted the proposal as likely to increase taxes and force some businesses to cut jobs.

The bill, co-sponsored by Sen. Edward M. Kennedy (D-Mass.) and Senate Majority Leader George J. Mitchell (D-Me.), is one of three major health care plans now being considered by Democratic congressional leaders.

Besides the “pay-or-play” approach, as the Kennedy bill is known, Democrats also are considering legislation to extend Medicare benefits to all Americans and a third approach that would create a federal health care system similar to that now in effect in Canada.

Republicans--and some Democrats--are promoting plans to broaden current health care coverage by offering workers tax credits to help them afford private health insurance, financing it by taxing health benefits that higher-income workers receive from companies.

President Bush is expected to propose similar legislation in his State of the Union address Jan. 28 and to provide a detailed health insurance plan in a speech in mid-February. It isn’t known yet which income groups would be subject to the increased taxes.

Democrats already have begun pushing the issue. On Tuesday, House Democrats, seeking to muster public support for their own legislation, conducted more than 200 “town meetings” across the country to make constituents aware that the party is moving on the issue.

The Kennedy measure is not expected to go to the Senate floor for a vote until late spring or early summer and could be derailed entirely if a majority of senators ends up favoring another approach. Some analysts are predicting that no major health bill will be passed until 1993.