Fwd: [DGV] White House Backs Limits on Spending for Medicare

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Tuesday, November 04, 2003

Year 4

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Title of Article: White House Backs Limits on Spending for Medicare

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Article:

White House Backs Limits on Spending for Medicare

By ROBERT PEAR

WASHINGTON, Nov. 3 - 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, B. Bolten, and

Tommy G. , 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 M.

Spratt Jr. of South Carolina, senior Democrat on the budget

committee.

One of the two Democrats participating in the Medicare

negotiations, Senator 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.

http://www.nytimes.com/2003/11/04/politics/04MEDI.html?ex=1068940371 & ei=1 & en

=3e63de39cc3cd8b7

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