Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SUNDAY, August 20, 1995 TAG: 9508180087
SECTION: HORIZON PAGE: D1 EDITION: METRO
SOURCE: JOEL CONNELLY SEATTLE POST-INTELLIGENCER
DATELINE: LENGTH: Long
``Without Medicare, a lot of us would be on welfare,'' said Doris Mae Baker, 70, a resident of the Des Moines Vista Retirement Center in Des Moines, Wash.
In ways no one can predict, the system that finances health care for 37 million elderly people is likely to change - if not for Baker, then for her children and their children.
In budget-cutting moods, both Democrats and Republicans agree growth of the 30-year old health program must be slowed if the federal budget is to be balanced.
President Clinton has proposed to pare back planned Medicare spending by $120 billion over the next seven years in a plan that would not change existing benefits.
The Clinton plan is designed to help balance the budget in 10 years and keep Medicare solvent at least through the middle of the next decade. It also would buy time for Congress and the White House to figure out how to keep Medicare going when the baby boom generation starts retiring in about 15 years - and flooding the system with new beneficiaries.
Republicans, who want to pass a big tax cut and balance the budget within seven years, have proposed a much more radical plan. They would squeeze $270 billion out of projected Medicare spending over the next seven years.
The GOP wants to scale back Medicare's annual rate of growth to 7 percent; the program had been projected to grow at a rate of 10 percent a year because of medical inflation and the growing number of beneficiaries.
``If you can't get [Medicare costs] under control, you won't control the budget problem,'' Rep. Rick White, R-Wash., said earlier this month.
Both parties are taking their cases to the country during Congress' August recess. Republicans and Democrats are fighting for the hearts and minds of voters like Doris Mae Baker.
In September, House GOP leaders will unveil plans for how to realize the savings.
``There will be changes,'' White said. ``They will not be that Draconian.''
But GOP leaders are circulating plans that would increase patient costs, reduce some benefits and perhaps offer an annual voucher payment to the elderly. Seniors would be responsible for paying medical costs above the sum provided.
Offering a choice of opting out of Medicare is close to the hearts of conservative House GOP leaders. House Majority Leader Dick Armey says, ``I resent the fact that when I'm 65 I must enroll in Medicare. ... It's an imposition on my life.''
Democrats say such plans will force elderly Americans and their families to dig into their pockets to pay medical expenses.
Bruce Vladeck, head of the federal Health Care Financing Administration, predicts that ``the average Medicare beneficiary in the state of Washington will pay $300 more out of pocket for the coverage they get now'' under Republicans' plans.
``The idea that you can reduce by nearly $300 billion over the next seven years and not reduce services is nonsense,'' said Rep. Jim McDermott, D-Wash.
At the GOP's rate of increase, argues McDermott, any Medicare voucher system would fail to keep pace with increases in private insurance premiums - leaving seniors with hefty out-of-pocket payments.
If GOP plans go through, he predicts that ``for the first time in 30 years, children of my generation and younger will have to figure out how to pay for their parents' health care.''
Clinton's plan relies on squeezing $90 billion out of payments to Medicare's physician and hospital providers. It also would extend several cost-saving laws scheduled to expire.
The Republicans say they are saving Medicare from bankruptcy.
``If we don't change Medicare, by the year 2002 it will run out of money,'' White said.
They cite a recent report by Social Security and the Medicare Board of Trustees saying the hospital insurance trust fund - Medicare's Part A - will run out of money in seven years.
This is the ninth occasion on which the trust fund has been projected to be seven years or less from going broke. In 1970, it was said to be only two years from insolvency.
Past funding crises have been averted with minimal controversy. Congress and the White House have made repairs, mainly by moving to control hospital and doctor bills. In 1993, Clinton's deficit reduction program increased taxes on upper-income Social Security recipients and extended the trust fund's solvency by three years.
But this year's report has become the centerpiece of a Republican campaign to sell the $270 billion in proposed Medicare scale-backs.
The House Republican Caucus has put out a list of ``Suggested Talking Points'' and specific instructions for holding town meetings on Medicare. It begins with a list of ``General Themes'' that includes:
``Bipartisan agreement that Medicare is going bankrupt.''
``You congressman are personally committed to saving the Medicare system.''
``Traditional Medicare will remain - but it may cost more.''
``We can protect, preserve and strengthen Medicare.''
``Medicare spending per individual will increase from $4,800 to $6,700 - an increase of nearly 40 percent.''
Rep. Randy Tate, R-Wash., stuck closely to House Republican leaders' script recently as he talked to about 45 seniors at the Des Moines Vista Retirement Center.
``If you're on Medicare today, the average beneficiary receives $4,800 in benefits a year,'' he said. ``By 2002, we will be spending $6,700 per Medicare recipient.''
He had a hard sell. Several seniors were openly skeptical of Tate's claims.
``It's not reassuring at all,'' said Baker, who once ran a tavern in Tacoma. ``I'm worried. I can't afford to pay more. I hope my children will be able to draw from it, but I'm advising them to buy IRAs.''
Richard Humphrey, 67, said he was ``a little skeptical'' of Tate's reassurances, and would be more comfortable with Clinton's level of savings.
``I'm hoping for the best, that [House Speaker] Newt Gingrich won't run over everybody roughshod,'' added Humphrey, a retired journalist.
The skepticism of Des Moines seniors is mirrored in a nationwide poll of 1,003 adults taken for The Associated Press poll earlier this month. The poll, by ICR Survey Research Group of Media, Pa., had a margin of error of plus or minus 3 percentage points.
One-fourth of those polled put a lot of trust in the Republican-led Congress to handle Medicare, but 48 percent have ``not very much trust'' and 23 percent profess ``no trust at all.''
The negative ratings added up to 71 percent, spread relatively evenly among all age groups. Even among Republicans, 45 percent had little or no trust in their own party's leadership when it comes to Medicare.
Democrats have seized on the Medicare issue, seeing the Republican plan as attacking one of the century's key social programs, but also offering political opportunity.
They have crunched numbers, saying for instance that the GOP plan would cost beneficiaries in King County more than $620 million for services they get today.
Such figures are ``a scare tactic,'' replied Rep. Jennifer Dunn, R-Wash.
The Democrats have also raised an old populist argument, saying Republicans' scale-back of Medicare is designed to pay for the planned tax cut that will go along with the GOP's budget-balancing plan.
``They're proposing to cut Medicare by more than $270 billion to give a tax cut of $245 billion to their wealthy friends,'' said Rep. John Lewis, D-Ga., who led a demonstration that disrupted Gingrich's recent appearance at a Medicare conference.
The debate over Medicare has been nasty and brutish, and it may turn out to be short.
House Republicans are talking about bringing their Medicare plan to a vote within three weeks of its unveiling, leaving no time for the kind of slowly building opposition that killed Clinton's health care plan.
by CNB