Inside the Whitman Walker Clinic in Northwest Washington, numerous plaques and certificates line the lobby wall, testimony to the extraordinary work being done there. A nationally recognized model of community-based medicine, Whitman Walker is probably the single most important battle station in the Washington area's fight against AIDS.

But a closer look reveals deep anxiety on the faces of its 90-member staff. It is more than the usual concern about the comfort of the hundreds of patients.

What has disturbed the staff is an incredible rise in the cost of employee health insurance -- from $300,000 to nearly $1 million in 12 months.

This is catastrophic health insurance in the worst kind of way. At the rate that the premiums are increasing, the clinic will almost certainly be closed by next year.

"If this place closes or if I have to go out on disability, it would be terrifying," said John Maddix, the clinic's director of education. "Well over one-third of any income I could expect would be taken up by insurance premiums."

At the end of 1989, Whitman Walker's monthly premiums were $229 per employee per month. In January, Blue Cross and Blue Shield increased the premiums to $402. Another rise, announced this month, represents a 49 percent increase, with individual premiums at $600 per employee per month and family coverage at $1,470 per employee per month.

"Isn't it sadly ironic that private health insurance may put us out of business after we have saved the industry millions of dollars by providing free AIDS medical care, case management and prevention?" asked Jim Graham, administrator of the clinic. "We've never faced a crisis of this magnitude before. But I've got to remain optimistic. Otherwise, we shut down."

According to a spokesman for Blue Cross, insurance premiums for medical facilities such as Whitman Walker are increasing around the country. The reason given is that the cost of providing medical care keeps going up.

On the other hand, Graham contends that the increased insurance premiums are due to the fact that the clinic employs gay men, a group at high risk for contracting the AIDS virus.

In recent years, several employees who had been diagnosed as HIV positive have contracted AIDS, causing an increase in benefits paid by Blue Cross.

Some Whitman Walker employees say the insurance company is attempting to recoup its losses by "picking up in the future what was paid out in the past," and they scheduled a demonstration in front of Blue Cross and Blue Shield headquarters for yesterday.

"It's very unfortunate," Graham said. "This is an endless cycle of rising premiums and payouts. But where does it all end? With us closing our doors?"

What would happen to Whitman Walker employees if the clinic closed can be gleaned from the lives of many former employees. In some cases, their insurance premiums have risen from $129 a month to $400 a month -- without notice -- during a six-month period.

And that does not include the nearly $1,000 a month that many of those who have contracted the AIDS virus must spend for medicine. "It is an unbearable situation," said one former employee, who has AIDS. "The stress over worrying what the insurance companies are going to do next only exacerbates the illness."

If the closing of Whitman Walker would be bad for its employees, the effects on its hundreds of clients would be even worse. The clinic offers free medical services, operates nine houses for people with AIDS and runs a nationally renowned AIDS prevention program.

Clearly, the rising cycle of premiums that Graham speaks of must be broken. One solution, he suggests, would be for the D.C. Council to bring Whitman Walker employees into the government employee insurance plan.

One way or another, the city is going to have to pay -- less, by acting prudently or more, much more, if Whitman Walker becomes a casualty in the fight against AIDS.