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House Panels Approve GOP Plan to Overhaul Medicare : Congress: Controversial proposal advances on straight party-line votes. Demonstration by senior citizens disrupts one committee meeting.


* Create new medical savings accounts, combining insurance and a savings mechanism. If the government pays $4,000 for an average beneficiary, for example, that person could pick an insurance plan costing just $2,000, with an annual deductible of $2,000. The $2,000 saved this way could be placed in a tax-free account, available to pay medical bills.

* Provide deep reductions in payments to hospitals that train doctors, and those caring for large numbers of poor people.

* Reduce sharply the growth rate in payments to doctors and other providers.

The Senate Finance Committee's bill, approved last month, takes a somewhat different approach and asks more of a sacrifice from beneficiaries. It would boost the annual deductible for doctor bills, now $100, to $150 next year, and then add another $10 a year until 2002. It also would allow enrollees to get rebates if they can obtain insurance coverage for less than the premiums allowed by the government.

Rep. Bill Thomas (R-Bakersfield) said his party's blueprint is a "bold initiative" that will "protect, preserve and strengthen Medicare."

The GOP Medicare juggernaut has all but obscured the unprecedented degree of unity that Democrats have achieved in recent days--speaking with one voice in a way that they have not done all year. Some are predicting that this cohesion, however ephemeral, could nevertheless cause a reduction in the spending cuts that Republicans want to impose.

"They've finally coalesced our group--we're united," said Rep. Sam Gibbons (D-Fla.), the top Democrat on the Ways and Means Committee.

"We're hoping it's a defining issue in the elections next year," added a top aide to the House Democratic leadership. "It's rare for Democrats in the House, the Senate and the White House to all be singing from the same page."

"This is an important issue that we can unite around," said Rep. Blanche Lambert (D-Ark.). "I'm for cuts, but this is going too far."

Several other members of Congress, however, warned that such unity is unlikely to endure.

"Most Democrats have come around to believing that we've got to fix Medicare. But there are major differences over how far to go [in cutting Medicare's growth rate]," warned Rep. Tim Roemer (D-Ind.).



Now that the congressional committees have completed their work on Medicare legislation, the full House and Senate will vote on their respective bills, which will then go to a conference committee to work out differences. Each house will then vote on the final version of the bill. That measure will be included with key GOP initiatives on Medicaid, taxes and other issues in a single reconciliation bill. The reconciliation bill will then be attached to the legislation raising the federal debt ceiling next month. The legislation then goes to President Clinton, but the White House has indicated Clinton will veto the measure if it contains cuts that he considers to be too severe.

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