THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Monday, October 16, 1995 TAG: 9510160024
SECTION: FRONT PAGE: A1 EDITION: FINAL
SOURCE: BY DEBRA GORDON, STAFF WRITER
LENGTH: Long : 167 lines
For 30 years, older Americans have been able to count on a comprehensive health care plan: Medicare.
It hasn't covered everything. But Medicare has paid a large chunk when those senior citizens were hospitalized. It has paid 80 percent of their doctor bills. And it has given them and their families peace of mind that, should a serious illness strike, they would have a support system.
Nine times during the past three decades a warning bell was sounded by the program's trustees: Do something fast, or Medicare will run out of money.
And nine times, the government, the program's administrators, even its 37 million beneficiaries, did something - usually with a minimum of panic.
But in April, when the warning bell rang again, the response changed. The sense of urgency increased disproportionately to the crisis at hand, advocates for the elderly say. And the phrases ``Medicare reform, Medicare overhaul, fixing Medicare'' echoed through Congress.
As a result, two House committees last week passed legislation that, its backers promise, will ``save Medicare.'' The full House will debate the issue this week.
The Republicans say they can save Medicare by cutting $270 billion over the next seven years. Their plan, and sister legislation in the Senate, would make those cuts by fundamentally changing the way senior citizens receive their health care.
The Democratic plan, which did not make it out of committee, would have cut $90 billion.
But deep cuts, says one leading health care policy analyst, are not the answer to the program's continuing financial problems.
Everyone agrees that Medicare has money problems.
There are two parts to Medicare, which Americans become eligible for upon turning 65.
Part A is the hospital portion. It is financed through a payroll tax on every working American. It has nothing to do with the federal deficit.
Part B pays for physician services. It is funded through general taxes and also through the $46.10 a month in premiums paid by beneficiaries.
Part A is the financially troubled portion of Medicare. As people live longer, swelling the Medicare rolls, the amount of money needed to pay for hospital coverage continually outstrips what is paid into the fund. That problem will worsen in 15 years, when the first baby boomers hit 65.
But to use inflammatory words like ``bankruptcy'' and ``insolvency'' to describe the state of Medicare is ``hysterically at odds with the truth,'' said Theodore R. Marmor, professor of public policy and management at Yale University.
He is the author of the 1973 book, ``The Politics of Medicare,'' the second edition of which will be published next year; a 1994 book, ``Understanding Health Care Reform''; and numerous op-ed pieces in the Boston Globe and Washington Monthly. He's also a consultant to the House Ways and Means Committee, one of the committees through which the pending Medicare legislation passed last week.
``Almost no one seems capable of calmly turning to the Democrats and saying, `Stop crying wolf and say something sensible,' and of saying to the Republicans, `Stop deluding yourselves and the public that we have a monetary disaster that requires action now,' '' Marmor said.
The Republican-backed legislation that the House is expected to vote on this week is designed to keep the system in the black for an extra eight years, until 2010.
It would do that by raising premiums, limiting fee increases to doctors and hospitals, and - as the bill's foundation - persuading more beneficiaries to choose private HMOs.
In Marmor's view, the GOP plan and the failed Democratic bill approach the problem from the middle, instead of the beginning. He suggests that Medicare be run more like a managed-care company, with stricter oversight on expensive procedures, and stronger bargaining with doctors and hospitals.
Medicare spending is not out of control, he maintains, although it was during the early years. In the first five years of Medicare's operation, costs rose more than 70 percent although the number of insured grew just 6 percent. Even in the early 1980s, Medicare costs grew more rapidly than American medical care in general.
But from the mid-1980s through 1991, Medicare rose less rapidly, thanks to new reimbursement systems for hospitals.
That proves to Marmor that cost-containment controls - rather than revamping the whole system through managed-care plans - can work.
``The idea that the choice of an insurance plan is a meaningful area of choice flies in the face of every bit of common sense any rational person has,'' Marmor said. ``It is idiotic.''
It is scary. People are scared, especially the ones who are on borderline poverty and just above,'' said Jackie Thomas, of Parksley, Va. Thomas is a volunteer on the Eastern Shore who helps the elderly file Medicare claims and obtain supplemental insurance.
``What is happening is going to confuse a lot of elderly people,'' said Thomas, who, at 68, receives Medicare.
She doesn't understand how the government can expect older people to join HMOs en masse. ``They have enough problems dealing with Medicare. If they put three or four plans out there to choose from, it is going to be catastrophic.''
And there is no guarantee HMOs would work. Even one of the bill's authors, Rep. Jim McCrery, R-La., said: ``Frankly, we're taking a risk with this plan. If the private sector doesn't respond as we think it will, then this plan may not work.''
So far, senior citizens haven't flocked to Medicare HMOs, even though they're largely available and generally cover more services than Medicare. In Virginia, less than 10,000 of the state's 664,000 eligible beneficiaries are enrolled in managed-care plans. Nationally, less than 10 percent have chosen HMOs.
Older Americans are most worried, however, about the premium increases.
June Cox of Virginia Beach doesn't know whether she can squeeze the extra money from her budget. She and her husband get about $868 a month in Social Security, she said. From that pool, she pays $92 for Medicare premiums.
The Coxes also have to pay for the things Medicare doesn't cover - prescription drugs, eyeglasses, dental care, hearing aids, and, if they need it someday, long-term nursing home care. Many older Americans buy supplemental health insurance to pay for those items, but the Coxes can't afford it.
Under the Republican-proposed premium increases, Cox and her husband probably would drop the part of Medicare that pays for doctor bills, she said.
If people like Cox can't afford Medicare's premiums, deductibles and co-insurance, warns one medical expert, they may forgo care altogether until their condition deteriorates into a more expensive emergency.
Dr. Daniel Blazer, dean of medical education at Duke University School of Medicine, recently completed a study showing that cost - not access to medical care, as commonly thought - is the main barrier to Medicare beneficiaries receiving proper medical care.
As well, he said, ``The bad experience with health-care reform . . . has led Congress to want to do something quick and fast. One of my concerns is that this does not take into account the complexity and diversity that this whole process must include in its deliberations.''
In the end, Marmor's ideas may get a wider audience. President Clinton has promised to veto the Republican plan, sending everyone back to the drawing board.
MEMO: The Associated Press contributed to this story.
ILLUSTRATION: Graphic
Side Bar The Republican plan for Medicare reform, which the House
should vote on next week, would:
Charge higher premiums. The current rate structure is: $46.10 a
month $44 in 1996 and $61 by 2002. The proposed change is: $54 in
January 1996 and $87 by January 2002. Those earning $75,000 a year
or more would pay even higher premiums.
Shave fee increases for physicians, hospitals and other medical
providers. Payments to doctors would not be cut.
Limit malpractice awards to $250,000 for pain and suffering and
$250,000 for punitive damages.
Encourage the elderly to join private health insurance plans,
primarily HMOs. This is where the bulk of the savings would come,
Republicans say.
The Senate version of the bill raises the eligibility age for
Medicare from 65 to 67.
Marmor suggests Congress:
Consider raising the payroll tax.
Cap Medicare expenditures, especially diagnostic tools such as
MRIs. Either pay less per MRI or don't pay in cases where it has
been misused.
Pay providers less. The government should use its clout to cut
better deals with doctors and hospitals.
Do less of what makes less sense. Give more authority to
physicians to decide when procedures that are of questionable value
should be done. Make fewer heroic last efforts to save patients.
Try administering Medicare directly. Currently, the government
administers the program through regional insurance companies like
Travelers and Blue Cross.
Fill in gaps in coverage. Medicare doesn't cover prescription
drugs or long-term nursing home care - which forces some people to
forego drugs they need to stay healthy. If benefits were expanded,
beneficiaries would be more willing to pay higher premiums.
by CNB