MEDICARE: Clinton To Resubmit $1.4 Billion Buy-in Plan
President Clinton, concerned about the growing number of uninsured near-seniors, will resubmit his plan to allow people as young as 55 years old to buy into Medicare. According to administration officials, "the proposal is needed because commercial insurance is often unavailable or unaffordable for people age 55 to 64." The New York Times reports that approximately 3.2 million people in that age bracket lack insurance, up 7% in 1997, according to the Census Bureau. It is unclear how closely Clinton's new proposal will hew to the bill introduced last year by Sen. Daniel Patrick Moynihan (D-NY) with the administration's backing. That measure would have set the Medicare buy-in at $300 to $400 a month for people age 55 to 64, with people 62 to 64 years old paying a surcharge after they reached the regular eligibility age. The Clinton administration, backed by Congressional Budget Office estimates, said its new plan would cost $1.4 billion over five years. When the Moynihan bill was introduced last year, "insurance experts said ... the plan would not work in the long run because it would attract sicker patients" over time as premiums rose and healthier beneficiaries under 65 opted out of the program. The Times reports that Congressional Republicans "have shown little interest in Clinton's plan" (Pear, 1/10).
On the heels of last week's news that the Clinton administration may be considering cuts in Medicare hospital reimbursements, the AP/Boston Globe reports that "administration officials are warning health care providers that the president's proposed budget may further trim Medicare payments." The American Hospital Association's Richard Pollack said, "We were hoping for some relief, but ... we were told they were in fact considering some additional reductions." Pollack added that "administration officials have revealed no specifics about how deep the new cuts might be or which types of health care services might be affected." The AP/Globe reports that Medicare Payment Advisory Commission (MedPAC) Chair Gail Wilensky doubts the feasibility Clinton's plan to cut Medicare reimbursements to hospitals. Those cuts were spurred in part by a MedPAC report that showed hospitals' inpatient care profit margins averaged 16%. However, Wilensky noted that the report didn't "reflect $115 billion in Medicare cuts over 10 years" under the 1997 Balanced Budget Act. She said, "I would be reticent to recommend additional reductions now. I think you ought to look to see what you've done before you do yet more." Hospitals have argued that the MedPAC report overstated their financial health (Love, 1/9).
The New York Times "Week In Review" section reports that although supporters of moving Medicare to a premium support program have cobbled together an 11-vote majority, "[m]uch more has to be agreed on before [former HCFA head Bruce] Vladeck, [Brandeis University's Stuart] Altman and other Democratic appointees will agree on a voucher plan to send to Congress." Rather than follow in the steps of the Medicare HMO program, which offered fixed, capitated payments to health plans, "[m]any economists favor plans setting their own premiums" and Medicare paying a set percentage, with beneficiaries making up the difference. Those in favor of this approach "point out that this plan exposes the beneficiaries to little risk because it ties the dollar value of the voucher to the premiums that health plans actually charge in the market." The Times concludes that "something of potential importance occurred last week. Vladeck and other defenders of the current system know they cannot make traditional Medicare work well unless Congress gives it the power so long withheld. But ... the road to the best fee- for-service plan possible runs right through the voucher system" (Weinstein, 1/10).
- Kansas City Star's Jerry Heaster: "Whether it's fantasy or not," premium support "is no more fantastic than the prevailing assumption that taxpayers can finance forever carte blanch access to the medical-care demands of an increasing cohort of senior citizens living ever-longer lives. ... The only thing known for sure is that the current system is collapsing under it's own weight, and the government isn't ... geared to deal with the challenge in a rational manner" (1/8).
Sens. Chuck Grassley (R-IA) and John Breaux (D-LA), chair and ranking member of the Senate Special Committee on Aging, respectively, announced Friday that they will concentrate on eight themes in the coming year: saving Social Security; enhancing pensions, facilitating savings and encouraging employment for older Americans; saving and improving Medicare; improving long term care; oversight of federal programs for older Americans; preventing seniors from fraud; reducing the burden of dependency through medical research and promoting awareness of quality of life issues affecting older Americans." Grassley said, "The president was right to recognize the aging of America as a major challenge of the next century" (committee release, 1/8).