Medi-this. Medi-that: 2 different problems

THE BALTIMORE SUN

TWO MONTHS AGO, when the American Medical Association announced support for Speaker Newt Gingrich's plan to trim the growth of Medicare costs, Republicans were delighted. So this past week, when the medical association criticized Republican proposals for severe cuts in Medicaid funding, it was hard for the GOP to brush off the rebuke.

Medicare and Medicaid were created simultaneously, with a stroke of the same Lyndon Johnson pen that President Clinton used last week to veto the Republican budget.

But the similarity in names disguises important differences in these government health-care programs.

And despite President Clinton's denunciation of cuts to both programs as damaging and unacceptable, Medicare and Medicaid have received vastly different treatment in the quest for a balanced budget.

Saved from ruin

Medicare, available to all older Americans, has become a treasured entitlement, saving millions of middle-class families from the threat of financial ruin as relatives age and need expensive medical care. It will remain an entitlement, but it is slated for cutbacks that Democrats have taken delight in describing as devastating.

Their claims are highly debatable, as Matthew Miller has pointed out in The New Republic. The Medicare "cuts" in payments to physicians are calculated on data that ignore downward pressures on physicians' fees in the private market.

Democrats are predicting disasters in which fewer doctors will be willing to accept Medicare payments, but the savings proposed by Republicans will in fact leave many Medicare payments at levels higher than private insurers are willing to pay. No wonder the A.M.A. supports the plan.

Meanwhile, the picture for Medicaid recipients -- who lack the political power of the Medicare lobby -- is grim indeed. Medicaid is designed for poor and disabled Americans, providing them with a medical safety net.

The Republican plan would have ended its entitlement status and effectively removed any kind of safety net for health care. President Clinton was right to veto a budget that would have cut the heart out of this program.

Block grants

The Republican plan for Medicaid would have funneled money to states through block grants. And it would have squeezed those funds so drastically -- some $165 billion over seven years -- that even the thriftiest and most efficient states would face impossible choices between providing services to mothers and children or to the disabled and elderly who need long-term care.

Under that scenario, states already facing tough budget pressures in Medicaid and elsewhere would find themselves unable to cover all the needy cases already on their rolls.

The results would make the disability-assistance cuts in Maryland look like a picnic.

Without coverage, poor people would turn to hospital emergency rooms, the most expensive form of care.

Hospitals, already facing financial strains in a changing marketplace, would be swamped by the cost of uncompensated care -- or find themselves turning away uninsured people who need care.

A mere $54 billion

Even President Clinton, who vows to protect Medicaid, projects hefty cuts, somewhere around $54 billion. That will hurt, but it won't be as debilitating as the Republican plan.

No one doubts that there are ways to improve efficiency and save money in Medicare and Medicaid. And no realist believes the country can sustain the rapid growth in the cost of these programs.

Something has to happen. But the ironies are obvious when some defenders of Medicare overlook glaring problems in the methods used to calculate its fees, while agreeing to cuts in Medicaid that could cause havoc not just for poor people but for hospitals and other parts of the health-care system.

Sara Engram is deputy editorial-page editor of The Sun.

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