ROANOKE TIMES

                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: FRIDAY, September 15, 1995                   TAG: 9509150095
SECTION: NATIONAL/INTERNATIONAL                    PAGE: A-1   EDITION: METRO 
SOURCE: KNIGHT-RIDDER/TRIBUNE
DATELINE: WASHINGTON                                LENGTH: Long


GOP SKETCHES NEW VISION FOR MEDICARE

- In an atmosphere that was part pep rally, part pregame prayer, Republican leaders Thursday outlined a new Medicare in which millions of elderly Americans would leave the traditional program for a variety of private insurance plans.

``Medicare is the heart of this fight,'' House Speaker Newt Gingrich, R-Ga., told House and Senate Republicans in a rare joint caucus on the GOP drive to balance the federal budget by 2002. ``Medicare is the core of whether or not we can do it.''

The $178 billion-a-year program provides health care for 37 million elderly and disabled beneficiaries, reaching virtually every family. It's one of the most popular government programs and the biggest middle-class benefit to come under the budget ax.

With costs growing about 10 percent a year, Medicare's hospital trust fund will go bankrupt by 2002. Republicans want to slow that growth to about 6 percent annually, saving $270 billion over seven years and extending the life of the trust fund to 2014.

After briefing their rank-and-file lawmakers in a closed meeting, House Republican leaders released a sketch of the plan that did not include any estimates of how much their proposals would save. However, they assured reporters that the savings goal would be met.

Democrats scoffed at the lack of detail. ``The Republicans' secret plan to reform Medicare is still a secret,'' said Louisiana Sen. John Breaux.

Senior Democrats complained that Republicans were trying to ram their plan through Congress without adequate hearings. Committee consideration is expected to begin next week.

The GOP outline called for dividing Medicare in two: the traditional program; and a ``Medicare Plus'' program in which the elderly choose from health maintenance organizations, or HMOs, networks of doctors and hospitals, medical savings accounts and other private insurance options.

Retirees could switch back and forth, with some limitations.

All private plans would be required to offer the basic Medicare benefit package, but would be free to add benefits. Insurance plans could not exclude retirees because of illness or age.

No one seemed to have a firm idea of how popular private plans would be with the elderly.

Some lawmakers predicted at least 75 percent of beneficiaries would be in private plans within seven years. Others said half. Outside experts doubt it would be higher than 40 percent.

About 9 percent of Medicare beneficiaries now are in HMOs. They offer more comprehensive benefits and lower out-of-pocket costs in exchange for restrictions on patient choice.

Both traditional Medicare and Medicare Plus would operate under strict cost controls.

Reminiscent of the old Gramm-Rudman balanced budget bill, traditional Medicare would be subject to ``fail-safe'' automatic cuts in payments to providers if spending exceeded limits.

There would also be new spending controls for home health care and Medicare's limited nursing-home benefit.

Costs in Medicare Plus would be controlled in a different way: The government would pay a fixed amount per person each year. The payment would go directly to health plans, instead of giving beneficiaries a voucher from the government.

Plans with rich benefits or greater choice of doctors could charge beneficiaries more. Retirees would pay the difference.

Lawmakers said no savings estimates were released because many important details still needed to be worked out.

But t

The House outline called for an increase of $7 to $10 a month in the Part B premium for coverage of doctors' services. Also, single retirees making more than $75,000 and couples with incomes above $150,000 would gradually lose a government subsidy that now covers most of the Part B premium.

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In a new turn for health care legislation, the House plan would eliminate federal funding to pay the salaries of hospital residents who are not U.S. citizens. Residents are medical school graduates getting on-the-job training. The proposal would also cut subsidies for training medical school graduates in highly specialized fields.

Republicans are also trying to complete a plan to reduce spending by $182 billion over seven years on the Medicaid program, which serves the poor, severely disabled people, and nursing home residents.

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The rhetoric escalated Thursday as Gingrich and President Clinton accused each other of trying to mislead the elderly about Medicare reform. Democrats repeated the charge that Republicans are merely trying to cut Medicare to pay for tax cuts that favor the wealthy. Clinton has called for smaller cuts in Medicare, while congressional Democrats have not put forward a proposal.

Senate Republicans met separately late Thursday afternoon to go over their options. A senior GOP aide said they were trying to resolve financing shortfalls that could lead to higher copayments and deductibles for beneficiaries.

``I think it's doable with some adjustments,'' said the aide.

Outside experts have predicted the Republicans could be tens of billions of dollars short on Medicare.

Gingrich has promised that added costs for beneficiaries will be limited.

The House outline called for a modest increase of $7 to $10 a month in the Part B premium for coverage of doctors' services. Also, single retirees making more than $75,000 and couples with incomes above $150,000 would gradually lose a government subsidy that now covers most of the Part B premium.



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