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House Approves Republican Bill to Overhaul Medicare : Legislation: GOP says package of higher premiums, cost controls would save $270 billion by 2002. It faces an uncertain future in the Senate, promise of a Clinton veto.

October 20, 1995|EDWIN CHEN | TIMES STAFF WRITER

WASHINGTON — Taking a giant step toward its goal of producing a balanced budget in seven years, the GOP-controlled House approved a Medicare bill Thursday that would reshape the 30-year-old health insurance program for older Americans.

The complex legislation--debated and passed without public hearings--would yield $270 billion in savings by 2002, Republicans say, largely by curtailing payments to doctors and hospitals, increasing out-of-pocket payments for beneficiaries and channeling many seniors into less expensive managed-care systems.

The bill would directly affect beneficiaries in several ways:

* It would nearly double monthly premiums for the voluntary, Part B doctor insurance. Those premiums, now $46.10, would rise to about $90 by the year 2002. The projected monthly premium would be $54 in 1996, $58 in 1997, $63 in 1998, $69 in 1999, $77 in 2000 and $84 in 2001. The Senate Medicare measure, approved by the Finance Committee, has a similar schedule.

* It would require an additional Part B premium from single beneficiaries with annual incomes above $75,000 and couples with incomes of $125,000 or more. The added payments also would be phased in over seven years and would be assessed on a sliding scale, with those in higher income brackets paying higher premiums. In 2002, a single person with an annual income of $100,000 or a couple with an income of $175,000 would pay the full amount--a total of about $120 a month.

The Senate bill would begin requiring couples making $100,000 or more to make an additional contribution.

* It would require an additional Part B premium from single beneficiaries with annual incomes above $75,000 and couples with incomes of $125,000 or more. The Senate bill would begin requiring couples making $100,000 or more a year to make an additional contribution.

* It would create tax-free medical savings accounts to allow beneficiaries to buy their own low-cost, high-deductible catastrophic insurance, with the rest of the funds being available for out-of-pocket medical expenses. Funds left over after a defined period could be used for non-medical expenses, but they would be subject to taxation and a penalty of 10%.

House Speaker Newt Gingrich (R-Ga.) called the vote "a big step in the right direction." Even so, the plan faces many obstacles in the weeks ahead. The debate now shifts to the Senate, where it will run up against an array of powerful special interests that have chosen to make their fight in that more deliberative body.

It also faces a veto threat that President Clinton renewed even before the House vote.

"I will not let you destroy Medicare and I will veto this bill," he warned Republicans at a White House press conference. "I have to do that to protect the people of the United States and to protect the integrity of this program."

The White House argues that the Republican revisions would restrict payments to doctors and hospitals so severely that many will become unwilling to treat Medicare patients. Clinton has proposed $124 billion in Medicare cuts over 10 years.

*

The bill was approved on a largely party-line vote of 231 to 201, with all but six Republicans supporting it and all but four Democrats voting against it.

"We are proud that we've stepped up to the plate and didn't shy away from a tough, controversial issue," said Rep. David Dreier (R-San Dimas). He echoed Republican predictions that the plan would extend the solvency of Medicare's hospital trust fund until 2010--a claim disputed by Clinton Administration officials, who have argued that the GOP plan would extend the fund's life only to 2006.

The final hours of debate leading up to the vote were filled with harsh rhetoric, reflecting rising acrimony between Republicans and Democrats over reforming Medicare.

Gingrich criticized the Democrats for perpetuating a "spirit of misinformation" in the Medicare debate.

When he spoke of the importance of preserving the program for future generations, Gingrich listed at some length his many relatives. That prompted Rep. Sam Gibbons (D-Fla.)--one of the few remaining House members who voted 30 years ago to create Medicare--to shout out derisively: "Does the gentleman have a dog?"

A short while later, many Democrats in the packed House chamber began chanting, "Hearings! Hearings!" even as Gingrich spoke--a reminder that Republicans did not permit public hearings on their proposal.

That issue dogged Republicans much of the day. Rep. Thomas J. Bliley Jr. (R-Va.), chairman of the House Commerce Committee, conceded at an informal morning session with reporters that not one House panel has conducted a hearing on the specific GOP proposals. "There comes a time for action," he explained.

Bliley also noted, as did Gingrich later, that members have convened "thousands" of town hall meetings throughout the country on Medicare reform.

"We listened and we learned," Bliley said. He added that Republicans stand ready to take any remedial actions should problems emerge as the plan is carried out.

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