Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: WEDNESDAY, January 18, 1995 TAG: 9501180065
SECTION: NATIONAL/INTERNATIONAL PAGE: A-3 EDITION: METRO
SOURCE: Knight-Ridder/Tribune
DATELINE: WASHINGTON LENGTH: Medium
The Republicans think they can save billions of dollars. If they succeed, the health insurance revolution that has swept the workplace finally would reach the elderly.
``We'll do it through a voluntary process, but in not too many years most seniors will be in managed-care plans,'' said Rep. Nancy Johnson, R-Conn., a veteran member of the tax-writing Ways and Means Committee.
Medicare - the government health insurance plan for 37 million elderly and disabled people - is an open-ended system that lets beneficiaries choose virtually any doctor or hospital. By contrast, most working-age Americans now get their coverage through plans that place at least some limits on choice.
Trying to change the way the elderly get their health care is considered so controversial that even the Clinton administration steered away from it in its ill-fated health reform plan.
``These [Republicans] are the guys who made choice vs. socialized medicine the debate for the last two years,'' said Martin Corry, a lobbyist for the American Association of Retired Persons. ``It would be ironic if they now take 40 million people and say: `Congratulations, you're in a system in which you have no choice.'''
Gail Wilensky, a leading GOP health care expert, said that's not going to happen.
``What we're talking about is much more gentle than what has occurred for the under-65 population,'' said Wilensky, who is advising Republican lawmakers.
She envisions a range of choices, from traditional Medicare to cost-conscious health maintenance organizations, with incentives for beneficiaries to pick cheaper plans.
And she adds a warning: ``If you want to keep Medicare open-ended, be prepared for the 30- to 40-year-olds to shell out big-time bucks for the 65 plus.''
Congressional Republicans stress that no decisions have been made, but they point out that balancing the budget could require more than $200 billion over seven years in cuts from projected increases in Medicare spending.
The magnitude of those numbers alone argues for a restructuring of the program, Republicans say.
House Speaker Newt Gingrich, R-Ga., has called for redesigning Medicare, and House Budget Chairman John Kasich, R-Ohio, recently said Republicans are looking to the private sector for ideas. Medicare originally was modeled on employer-provided insurance, which used to allow open-ended choice until medical costs shot up.
In addition to managed care, Republicans are considering such cost-cutting measures as higher insurance premiums for well-off retirees and a limit on the rate of growth in Medicare spending.
Medicare costs are rising about 10 percent a year, while medical costs for the country as a whole are going up about 5 percent. Moreover, Medicare's hospital trust fund is expected go broke by the turn of the century.
``Managed care'' is a broad umbrella that covers any health plan that tries to control patients' use of medical services. Ninety-five percent of insured, working-age Americans are in managed care.
Some managed-care plans allow free choice of doctors but require approval for hospitalization. Others require patients to get their care from a ``preferred provider'' network of doctors and hospitals who have agreed to offer the plan a discount. Patients who go outside the network must pay more.
The most structured form of managed care is an HMO, which agrees to cover enrollees' medical needs for a set fee. HMO patients select a family doctor, who must approve any referrals to a specialist, costly diagnostic tests, or hospitalizations before the plan will pay.
Studies have found no significant difference in quality of care between HMOs and traditional insurance. But people with complicated illnesses or chronic conditions often shy away from HMOs.
About 19 percent of privately insured Americans are in HMOs, and enrollment is rising. About 8 percent of Medicare beneficiaries have chosen HMOs.
Wilensky said congressional Republicans have many options to try to get more Medicare beneficiaries into managed care, from breaking down barriers for HMOs to giving people ``a little nudge.''
by CNB