MEDICARE: Breaux Releases Premium Support Proposal
National Bipartisan Commission on the Future of Medicare co-chair Sen. John Breaux (D-LA) presented his Medicare reform plan Friday -- containing the basic outlines of a premium support plan. He noted that the plan was his own and not developed in concert with other panel members, but said he hoped is would "serve as a starting point during commission negotiations over a final package to be completed by March 1." CongressDaily reports that Breaux's proposal, long-expected since he endorsed the premium support concept along with co-chair Rep. Bill Thomas (R-CA) two weeks ago, would morph Medicare into a plan similar to the Federal Employees Health Benefits Program: a Medicare Board, given increased flexibility to negotiate payments and benefits, would pay "part or all of a beneficiary's premium if they choose to enroll in" an HMO, PPO or other health plan (Morrissey, 1/22). The Washington Post reports Breaux's plan, which would ask "private health plans to compete to provide their treatment," represents "an attempt to create momentum for serious discussion this year of Medicare" following President Clinton's proposal of reforms that would bulk up Medicare's finances without wholesale structural reform. Breaux said, "I think this is much more important than Social Security," and compared Clinton's plan to "putting more gas in an old car."
Nuts and Bolts
The program would be means tested so that higher-income beneficiaries would pay a higher percentage of their premium, and low-income beneficiaries would receive a subsidy. Also included in the Breaux plan is a measure that would gradually raise the Medicare eligibility age from 65 to 67. Other major reforms:
- The traditional fee-for-service Medicare option would remain as a choice for beneficiaries, but Part A and Part B premiums would be merged under a single deductible.
- Medicare would end its subsidies for training doctors -- currently $2.2 billion annually -- and that funding would be moved to the general budget.
- HCFA would cede much of its authority, with the health care market setting competitive rates and the new Medicare Board "overseeing outside health plans that treat Medicare patients."
Remains to be Seen
The proposal "drew relatively favorable reactions from Republicans and the insurance industry, while it was criticized by the commission's most liberal members" and all sides noted that it lacked major details such as "how much the government would pay health plans, how much rich and poor patients would have to pay, and what medical services would be included" (Goldstein/Havemann, 1/23). Rep. John Dingell (D-MI) said, "It throws the Medicare recipients on the tender mercies of HMOs, and I'm not satisfied that ... beneficiaries want to be placed in that position." Washington lobbyist Deborah Steelman, a Republican appointee to the Commission, said, "It begs many questions. ... I can't imagine voting for this." Commission member Stuart Altman of Brandeis University said, "There are a number of issues he's left vague or open, and ultimately they are the most important issues" (Rubin/Rosenblatt, AP/Los Angeles Times, 1/23). Commission member Bruce Vladek, a former HCFA head, said, "There's certainly one vote he's not going to get."
Drugs for All?
"Breaux also said the commission is likely to recommend adding a prescription drug benefit for Medicare," although his proposal did not contain one. "People would like to have a drug program if we can find a way to pay for it," he said (Los Angeles Times, 1/23). Also up in the air is whether plans would offer identical benefits: the Los Angeles Times reports that "Republicans typically favor a variety of benefit packages; most Democrats want a standard package so recipients could easily compare prices" (1/23). Breaux said the benefits offered would have to at least be equivalent to the FEHBP package (Pear, New York Times, 1/23). The commission is slated to meet tomorrow to discuss the proposed reforms (CongressDaily/A.M., 1/25).