MEDICARE: Commission, Pessimistic, Mulls Changes
The federal commission convened to discuss Medicare reforms yesterday painted a bleak picture of the system's fragile future, but began to approach consensus on at least one key policy issue. The National Bipartisan Commission on the Future of Medicare concluded that "even with radical reforms" such as increasing the eligibility age and creating catastrophic coverage with a $4,000 deductible, Medicare will still be $208 billion in debt by 2030. The Part A Hospital Trust Fund alone will run $30 billion short "even if all seniors were shifted into private health plans on top of other reforms." The Washington Times reports that yesterday's debate was "reminiscent of arguments that sank reforms proposed by an earlier commission and considered by the outgoing 105th Congress." Sen. Bob Kerrey (D-NE) said, "Everybody wants to solve the problem but nobody wants to give up anything," noting that reaching an 11-vote majority for a reform package by the 17-member commission by the March 1 deadline will be difficult (Goldreich, 12/3). Commission Chair Sen. John Breaux (D-LA) echoed Kerrey's concern, saying, "People come to Congress and say, 'Fix it, but don't change it.'"
Many committee members seemed receptive to an approach that would "rely more heavily on the health care market, giving the nation's elderly an insurance system similar to" the Federal Employees Health Benefit Program. Under that proposal, the government "no longer would set the rates it pays private health plans. Instead, Medicare would subsidize patients' purchase of health care coverage from plans that bid to participate in the program" (Goldstein, Washington Post, 12/3). Seniors would have the option of choosing from a number of private plans and paying higher premiums for more generous benefits. Republicans like the proposal's market focus, arguing that "competition among many private companies will squeeze out savings that the government has been unable to realize on its own" (AP/Las Vegas Sun, 12/3). "Democrats and the panel's more liberal outside experts," however, were critical of some aspects of the plan, asserting that the "predicted savings were exaggerated" and that it would unfairly benefit affluent seniors at the expense of rural and poor seniors (Post, 12/3). Sen. Jay Rockefeller (D- WV) said, "We have to protect people who have absolutely no margin for error" (AP/Sun, 12/3). Breaux seemed supportive of the idea, saying, "Every single member of Congress is under that program. It's not that outside the mainstream at all" (Meckler, AP/Nando Times, 12/3). Still, Breaux was concerned about what he called the prospect of a "Louisiana truck driver making $25,000 a year subsidizing Bob Kerrey's (billionaire investor) friend Warren Buffett" (Times, 12/3).
Rockefeller expressed disfavor for Republican panel members' resistance to a tax hike. He said, "I am personally concerned as to why a revenue increase was not put out there as a possibility. It is incomprehensible to me, unless there was a proscription not to do it" (Post, 12/3). The panel discussed, but "came to no consensus on," a variety of other issues, including prescription drug coverage, raising the Medicare eligibility age to 67, adding the catastrophic coverage and "removing subsidies for graduate education and hospitals that serve poor people." Yesterday's hearing was the first opportunity members had to debate the various ideas they have heard after months of testimony from experts (AP/Sun, 12/3).