The American Medical Association on Wednesday proposed revamping the nation's health care system by expanding Medicaid and requiring employers to provide health insurance to full-time employees.

The AMA's 16-point plan would create state risk pools to provide group insurance policies for the medically uninsurable, small businesses and others unable to afford coverage under the current system.The AMA is also urging a revision of medical malpractice laws to reduce liability insurance costs for physicians.

AMA officials at a news conference here declined to put a total dollar figure on the package, but an AMA source, speaking on the condition of anonymity, said a "fair estimate" was about $60 billion.

Dr. Alan R. Nelson, AMA president, did not say specifically how the plan would be financed, but he said, "Almost certainly this would require some increased taxes."

The physicians' group said its proposals are aimed at offering health care coverage to all Americans, regardless of income, and preserving patients' freedom to choose their health-care provider.

Dr. Nelson told The Journal of Commerce that conceptually, AMA's plan is similar to the program recommended last week by the bipartisan Pepper

Commission on Comprehensive Health Care, named for its first chairman, the late Rep. Claude Pepper, D-Fla. That blueprint calls for $66 billion in federal funds.

Both the Pepper Commission and AMA proposals are aimed at closing the gaps in the U.S. health care system. The nation's health-care bill is expected to reach $600 billion this year, more than 11 percent of the gross national product, yet more than 33 million Americans lack health insurance.

The two plans would be implemented differently, however.

The Pepper Commission is seeking a "pay or play" employer mandate, Dr. Nelson said in a telephone interview Wednesday. The commission is recommending that employers either provide health benefits to their workers or pay tax into a single federal pool providing universal health coverage for uninsured workers as well as the self-insured or poverty-stricken, including those now covered by Medicaid. Insureds would supply a co-payment premium based on their

financial status, and medical underwriting would be eliminated in favor of a geographically based system.

The AMA, on the other hand, is calling for a series of state-run pools designed to offer health benefits "at group rates" to otherwise uninsurable individuals, Dr. Nelson said. He gave as an example those with heart disease or diabetes.

The AMA would provide "uniform" Medicaid eligibility to the poor, so ''The poverty-stricken would not have to fit into an eligibility category as they do now," Dr. Nelson said. Beyond that, it is best that the two-thirds of those employed individuals who lack health insurance get such coverage "at the work site," he concluded.

Revision of the current system is "badly needed," Dr. Nelson told Washington reporters on Wednesday.

But "it would be counterproductive to fix aspects of our system that are not broken," he said. Highlights of the AMA plan include:

* Establishing state risk pools to make coverage available for the medically uninsurable and for others for whom individual health insurance policies are too expensive and group coverage is not available. About 15 states currently have such pools.

* Expanding Medicaid to all people below the poverty level, and establishing a uniform set of benefits. Medicaid now covers fewer than half of those living below the poverty line, and eligibility and benefits vary from state to state.

* Requiring employers to provide health insurance for all full-time employees and their families, and eliminating state-mandated benefits. Employers would be allowed tax deductions to help with costs.

* Expanding private sector coverage of long-term care with tax incentives.

* Encouraging the practice of defensive medicine - ordering tests and procedures that otherwise might not be conducted, for instance.