Medicare at a crossroads Action needed now: Clinton and Lott hint at accommodation as fiscal crisis mounts.


HINTS FROM President Clinton and Senate Majority Leader bTC Trent Lott that they will consider raising Medicare premiums charged to wealthy beneficiaries are a welcome sign that both parties are in cautious transition from rhetoric to reality. But scars left over from the last election make the process difficult.

The temptation to exploit the fears of senior citizens lives on. While most experts believe health maintenance organizations (HMOs) and managed care groups have been overpaid under the Medicare system, calls for cutbacks already have been attacked from both the left and the right. The former decries the possible loss of benefits, the latter the idea of punishing the most efficient providers.

This is just one example of the painful issues that are bound to arise when Washington finally comes to grips, if it ever does, with the fiscal impact of a boomer generation facing retirement just over the time horizon. Politicians know full well that increases in premium charges and payroll taxes, restrictions on medical benefits and greater controls over all segments of the health care sector cannot long be postponed. But because these are precisely the steps that can bring them grief at the polls, they resort to demagogy, deception, and delay as the problems mount up.

Yet the time of reckoning is near. By 2001, the Hospital Trust Fund under Medicare Part A will be depleted unless something is done. So Congress has a choice: Either hospital care will be funded by designated payroll taxes, as at present, or these costs will be borne largely out of general revenues as is the case with doctors' bills under Medicare Part B. The president has already indicated he would like to shift home health care costs from Part A to Part B -- a step Republicans rightly charge is a "gimmick" that will not result in any bottom-line cost savings.

Both parties have put forth rescue packages that do not come close to solving Medicare's long-term problems. These issues will probably have to be shunted over to a bipartisan commission whose recommendations will have to be accepted or rejected in their entirety. For now, the best that can be expected from this year's Congress is some action to keep the Hospital Fund solvent over the short term. If means-testing the affluent elderly is one cautious step in the right direction, then Messrs. Clinton and Lott may be on to something.

Pub Date: 1/30/97

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