Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: FRIDAY, October 20, 1995 TAG: 9510200061
SECTION: NATIONAL/INTERNATIONAL PAGE: A-1 EDITION: METRO
SOURCE: Knight-Ridder/Tribune
DATELINE: WASHINGTON LENGTH: Medium
House passage of the bill in the face of polls showing declining public support was a victory for Speaker Newt Gingrich, R-Ga. Only six Republicans defected, despite pressure from organizations representing the elderly. The final vote was 231 to 201.
Virginia's delegation split on the party line, with all Republicans voting for the package and all Democrats voting against it.
Gingrich, who oversaw writing of the bill and brokered key compromises, said the plan is for future generations. ``If we continue to go [with] the irresponsible, unorganized, bureaucratic waste and fraud-filled system, they will be crushed with taxes, crushed with debt,'' he said.
Republicans said their plan would modernize the health care program for 37 million elderly and disabled people by applying the same cost controls used by private employers.
The GOP plan would scale back payments to hospitals, doctors and other providers, increase premiums paid by Medicare recipients, phase out subsidies for upper-income retirees, and offer a range of private insurance plans as an alternative to traditional Medicare.
It would slow the average growth of Medicare from about 10 percent a year now to 7.1 percent a year, saving $270 billion over seven years and pushing back the projected bankruptcy of the program's hospital tax fund in 2002.
Separately, Republicans would also scale back the Medicaid health insurance plan for the poor, disabled, and elderly in nursing homes, saving $182 billion over seven years, and turning the program over to the states.
Despite the House vote, the GOP Medicare plan is still quite a way from becoming law. Senate Republicans - expected to begin their floor debate next week - face tougher political challenges.
The year could end in stalemate unless Republicans find a way to compromise with Clinton. They lack the two-thirds majority needed to override a presidential veto.
``The situation is somewhat fluid,'' acknowledged Rep. Thomas J. Bliley, R-Va., chairman of the Commerce Committee and a co-author of the bill. ``We have the administration sitting back on the sidelines throwing bricks. Let's see what they come up with, and if we can reach some common ground. I'd be willing to consider any reasonable compromise.''
At a White House news conference before the House vote, Clinton wasn't talking compromise. ``I will not let you destroy Medicare,'' he warned Republicans. ``I will veto this bill.''
Independent analysts say the GOP plan does not preserve Medicare for future generations, but merely postpones the day of reckoning a few more years.
Critics say the plan, far from transforming Medicare into a modern-day insurance system, would not go far enough in pushing elderly beneficiaries to join cost-conscious managed-care plans.
Ken Abramowitz, a health care market analyst with the New York investment firm of Sanford C. Bernstein & Co., said, ``For all the rhetoric, this is just traditional taking the meat ax to providers.''
The nonpartisan Congressional Budget Office estimated that 67 percent of the bill's savings would come from scaling back payments for hospitals, doctors and other providers, while 13 percent would come from beneficiaries joining managed-care plans.
Clamping down on the health care industry may lead to the closing of financially vulnerable hospitals, less income for doctors and other providers, and less money in the system to care for the uninsured.
The trade-offs are difficult, but the alternative to cutting Medicare could be a substantial tax increase. Most budget experts agree that controlling government spending on health care is crucial to eliminating the deficit.
Essentially, the House bill would divide Medicare in two: the traditional fee-for-service program, and a new ``MedicarePlus'' in which beneficiaries could choose from a range of private plans.
These would include health maintenance organizations, preferred provider organizations, private fee-for-service plans, and a new doctor-owned insurance plan.
The government would pay a fixed premium for each beneficiary in a private plan. Beneficiaries could get a refund if they pick low-cost insurance, but would have to pay the difference if they chose a more generous plan.
by CNB