White
House Backs Limits on Spending for Medicare
by
Robert Pear, the New York Times
November
4, 2003
WASHINGTON-
the Bush administration joined House Republicans on Monday in pushing a
proposal that would force Congress to vote on possible cutbacks in
Medicare if the costs of the program, including new drug benefits, grow
faster than expected.
The plan would also set limits on the use of general tax
revenue for Medicare.
Senate negotiators have offered a similar proposal,
labeled a "bipartisan Senate staff option." This suggests that
some cost-control mechanism is likely to be in any Medicare bill that
emerges from Congress, despite objections from many Democrats and
advocates for the elderly.
Both proposals would fundamentally change the financing
of Medicare. They would also make it more difficult for Congress to
enhance drug benefits, raise payments to doctors or provide coverage for
more outpatient services.
The proposals were discussed on Monday by a group of
House and Senate negotiators trying to meld Medicare bills passed by the
two chambers. The negotiators, most of them Republicans, have agreed on
the structure of drug benefits to be offered to 40 million elderly and
disabled people. The benefits are significantly less comprehensive than
those in many private health plans.
Democrats have said that if Congress enacts a Medicare
drug benefit this year, they will immediately campaign to expand it, so
that Medicare would pay more of the costs.
In the House, which passed the Medicare bill by one vote
in June, Republicans have demanded a mechanism to make sure the drug
benefits do not cost more than the 10-year budget allocation of $400
billion.
President Bush's budget director, Joshua B. Bolten, and
Tommy G. Thompson, the secretary of health and human services, have been
trying to devise such a mechanism in talks with the Medicare conferees.
Representative Jeb Hensarling, Republican of Texas, said
the proposals did not go far enough. "The conferees are working hard
and acting in good faith," he said, "but most of what I have
seen, read or heard about their work on cost containment reveals little
cause for optimism."
Democrats outside the conference committee are wary. The
proposed cost controls would "undermine Medicare's protection for the
elderly," said Representative John M. Spratt Jr. of South Carolina,
senior Democrat on the budget committee.
One of the two Democrats participating in the Medicare
negotiations, Senator John B. Breaux of
Louisiana
, favors a cost-control mechanism.
The other Democrat, Senator Max Baucus of
Montana
, said: "I personally believe that there should be some mechanism,
but it should not be discriminatory. It should not single out
Medicare." If the cost of new Medicare benefits must be offset to
avoid increasing the deficit, Mr. Baucus said, a similar requirement
should apply to tax cuts.
Under the latest proposal from House Republican
negotiators, Medicare would be declared "programmatically
insolvent" if its trustees found that general tax revenue would
account for more than 45 percent of Medicare spending at any point in the
next seven years. If the trustees made such a prediction for two
consecutive years, the president would have to propose ways to reduce the
dependence on general revenue.
That could be done by cutting benefits, increasing
beneficiary premiums or raising payroll taxes.
The proposal would create expedited procedures for
Congress to consider such legislation within six months. The procedures
would override normal Senate and House rules and would limit debate in the
Senate.
The Senate proposal also calls for the president and
Congress to take action if general tax revenue accounts for more than 45
percent of projected Medicare spending. The Senate could not consider any
legislation that increased the use of general revenue beyond that
threshold unless 60 senators wanted to do so.
In 2002, the federal government pumped more than $78
billion of general revenue into Medicare, accounting for about 30 percent
of the program's spending. Federal officials predict that the dollar
figure will more than double, to $170 billion in 2012, even without new
drug benefits.
The Leadership Council of Aging Organizations, a
coalition of groups representing the elderly, expressed alarm at the
cost-control proposals.
"Requiring Congressional action if and when
Medicare spending exceeds an estimated target would bring fear and
uncertainty to millions of Americans at a time in their lives when they
need security," the council said in a letter to conferees. An
unforeseen outbreak of a disease like SARS could make spending estimates
irrelevant, the council said.
But the General Accounting Office, the investigative arm
of Congress, said that Medicare's growing reliance on general revenue
imposed a mortgage on future generations.
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