Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: TUESDAY, September 12, 1995 TAG: 9509120069
SECTION: NATIONAL/INTERNATIONAL PAGE: A-1 EDITION: METRO
SOURCE: THE WASHINGTON POST
DATELINE: WASHINGTON LENGTH: Medium
Even before the GOP formally unveils its plan to save $270 billion in the Medicare program over the next seven years - considered one of the most difficult and politically perilous tasks facing the Republicans this fall - the White House Monday said it doesn't add up.
House Speaker Newt Gingrich, R-Ga., said Sunday that the monthly premium increases for Medicare Part B, the part that pays for doctors rather than hospital care, would increase by only $7 per beneficiary by 2002. But the White House said that, based on the sketchy details Gingrich provided, the monthly premium in 2002 would have to be $104.30, a $21.50 increase from what the administration estimates it would be if the program were left unchanged.
In addition, the White House said that, based on the information that has been released, Republicans are billions short in reaching their savings goal. Under any description, officials said, seniors are going to pay more and get less than the Republicans are letting on.
The swift counteroffensive is a symbol of the potency of the Medicare issue to both Democrats and Republicans and a sign of things to come. House Republicans are to unveil their full plan by early next week, and the savings they can wring from Medicare are an intricate piece of reaching a balanced federal budget in seven years while still reducing taxes. The White House has also proposed Medicare savings - $124 billion over seven years - but has declined to show its specifics until after the Republicans. Administration officials take the position that if the Republicans would drop their tax cuts, all sides could agree on $125 billion to $150 billion with far less pain for seniors.
Sources said Monday that the $270 billion in GOP savings would be broken down as follows:
About $60 billion to $70 billion over seven years by the Gingrich announcement of keeping the Part B premium at 31.5 percent. Medicare provides hospital coverage in its Part A without requiring premiums. Part B pays doctors' bills and is optional, although about 95 percent of those eligible enroll. Its premium was set at 25 percent in 1982. In the 1990s, Congress spelled out specific dollar figures in the law; the current $46.10 per month actually covers 31.5 percent of costs. It is supposed to revert next year to 25 percent. The money is deducted from monthly Social Security payments.
Another $10 billion or so from charging well-to-do seniors (over $125,000 income in the case of a couple and $75,000 for an individual) higher premiums than others, up to three to four times as much.
About $70 billion or so from restructuring Medicare to allow beneficiaries to purchase a private health plan with the government paying the premium. (Beneficiaries could also opt to stay in the existing traditional Medicare program.) The government premium payments would be capped annually to achieve these savings.
About $110 billion in cuts in the growth of government payments to hospitals, doctors and other providers of medical care.
These figures fall about $20 billion short of the $270 billion. Sources said one possibility being considered by GOP planners might require those who stay in the traditional Medicare program to pay a larger share of health bills than they now do in the form of larger co-payments and deductibles on health bills.
But Gingrich on Sunday seemed to rule that out. Perhaps stung by charges from Democrats and some senior groups that the GOP would hit beneficiaries with large new out-of-pocket payments, The House GOP plan appears to have dropped several provisions listed in early outlines, though provisions are still not final and could be altered.
With large chunks of the GOP plan still unannounced, Democrats nonetheless went into full-throated attack Monday.
In the House, Minority Leader Richard Gephardt, D-Mo., accused Gingrich of playing a ``shell game'' in disguising the true cost to seniors and failing to detail the savings, as well as in considering what amounts to a multibillion cap on spending if their projections turn out to be wrong.
``The fact is, there is no way you can carve $270 billion out of Medicare without making seniors pay more for less,'' he said.
by CNB