After a year’s work, a bipartisan Medicare commission failed to reach agreement Tuesday on a plan to overhaul the health care program for the elderly and keep it afloat when Baby Boomers retire early in the 21st Century.
President Clinton’s appointees on the panel blocked a plan that would make private health care an option for seniors and gradually raise the eligibility age from 65 to 67, causing Republican leaders in Congress to accuse the president of trying to turn Medicare into a political issue for the Democrats.
The president praised the commission’s work as useful but said that he couldn’t agree with a plan put forward by the panel’s co-chairmen, Sen. John Breaux (D-La.) and Rep. Bill Thomas (R-Calif.), because it did not set aside 15 percent of the federal surplus for Medicare and make other changes he wanted.
In a statement on the South Lawn of the White House, the president said he had instructed staff members to write an administration Medicare plan. “We must find agreement this year,” he said.
But the division on the commission and the suspicion in GOP ranks that the White House is maneuvering for political advantage cast doubt on whether a bill can be approved this year.
The sense of urgency to shore up Medicare has lessened from a year ago when the panel, known officially as the National Bipartisan Commission on the Future of Medicare, began its work.
New projections of a large federal surplus over the next decade offer potential resources for Congress to handle the problem, and the Congressional Budget Office forecasts that the program will not run out of money until 2012, several years later than originally thought.
Despite the waning prospects for legislation, commission members on both sides said they would press ahead with reform proposals.
Sens. Bob Kerrey (D-Neb.), Phil Gramm (R-Texas) and Bill Frist (R-Tenn.), all panel members, said they thought the commission’s plan would form the basis for legislation that would pass the Senate Finance Committee and the full Senate this year.
Ten of the 17 members voted for the Breaux-Thomas proposal, one shy of the supermajority needed to recommend it formally to Congress. Breaux said the current system must be restructured and that putting more money into it is like “putting more gas into an old car–it still runs like an old car.”
The commission proposal would have given beneficiaries more choice of benefit packages and would have required private health care plans to offer the elderly a “high option” that would include coverage for prescription drugs.
Beneficiaries would pay on average 12 percent of the premium cost for a standard benefits package but could pay more or less depending on how extensive a package they preferred. Those earning 135 percent or less of the official poverty line would have all their premiums paid by the government.
The traditional Medicare fee-for-service plan would be maintained, but there would be a $400 deductible indexed for the rise in Medicare costs. Also, 10 percent would be charged for laboratory services, home health and other services, but not inpatient hospital stays and preventive care.
Thomas said that Clinton’s insistence that 15 percent of the future surplus be set aside for saving Medicare does nothing to overhaul the system and would produce “a false sense of security” that everything is all right with the system.
Democrats on the panel said the Breaux-Thomas proposal amounted to a government-supported voucher system that would cause healthier seniors to gravitate to private health care plans and those who are ill or frail to remain in the traditional system.
Breaux disagreed that the plan amounted to a voucher system, although seniors would have more choice in the range of health plans they could choose under Medicare.
Laura D’Andrea Tyson, former chief economic adviser to Clinton, said the Breaux-Thomas plan doesn’t really bail out the system over the long run.
She said that the 15 percent Clinton wants to preserve for the system may be needed.
Rep. Jim McDermott (D-Wash.) said that, despite the subsidies for low-income people, he was afraid the program would raise costs for many Americans just above the poverty line, especially those living in urban areas.
Gramm said the country needs to move swiftly toward restructuring before the costs get out of hand. “Every year we wait the cost is going to get bigger,” he said.
