Medicare panel finds reform formula elusive; Prescription benefit, use of budget surplus are difficult issues; Vote scheduled today


WASHINGTON -- Divided and frustrated, the bipartisan commission entrusted with saving Medicare will limp into its final meeting this afternoon to vote on a reform plan that would open the federal health care program to private sector competition while promising a new prescription drug benefit for the elderly poor.

But with the commission still far from a consensus, hope has dimmed that Congress and the White House can reach a deal on Medicare before Washington is swept into the political maelstrom of the 2000 election.

"The work product of the commission will become law," vowed Rep. Bill Thomas, a California Republican who co-chairs the commission. "The question is, does it become law when it should, right away, or will it become law in a few years when all the decisions that need to be made will become more difficult?"

The newest reform proposal was unveiled only last night, and commissioners will have little time to review its details before today's vote. Eleven of the commission's 17 members would have to approve the plan to send it to Congress with the task force's seal of approval, but most commission watchers expect no more than 10 to support the plan.

Even before the first ballot is cast, the finger pointing has begun.

Republicans -- and a handful of moderate Democrats -- say President Clinton should have exerted more pressure on his four commission appointees to back an earlier version of the commission's reform plan. And they charge that his call to set aside 15 percent of the federal budget surplus -- or up to $700 billion over the next 15 years -- for Medicare effectively took the pressure off Congress to find a long-term solution for its financial woes.

"I'm very disappointed," said Sen. Phil Gramm, a Texas Republican who led the conservative wing of the commission. "We always knew it was going to be very difficult to get 11 votes, but the president effectively blew it up."

White House aides charge that Gramm and other conservatives are to blame for not even considering Clinton'ssurplus proposal, for failing to add a prescription drug benefit that would cover all recipients and for expecting commissioners to embrace complex policy changes that have not been thoroughly studied.

"I really went in hopeful that we could achieve something," said Bruce Vladeck, a health policy professor at New York's Mount Sinai School of Medicine who was appointed to the commission by the president. "But not only have we not achieved something, but we really haven't had an intelligent conversation about anything."

Commissioners and health care experts say the prospects for genuine Medicare reform would have been remote even with a unanimous commission vote, given the lack of public interest.

With Medicare insolvency possible within a decade, Congress and the White House appointed the commission in 1997 as part of the balanced budget plan.

Low-profile deliberations

But the commission labored largely in private, eschewing the kind of public debates that have created some momentum for change in the Social Security system. If Social Security has been "the third rail of American politics" for much of this century, that distinction is quickly shifting to Medicare.

"If you really wanted to create unstoppable momentum, you would've had to engage the public," said Vladeck, who used to head the Health Care Financing Administration, which runs Medicare. "You don't fix something like Medicare in a dark alley or behind closed doors."

Thomas A. Scully, president of the Federation of American Health Systems and a lobbyist for private hospitals, agreed.

"I don't think most people in Congress have the stomach this year to make the kind of changes that would be necessary, whether the commission has 11 votes or 10 or 9," Scully said. "A proposal like this needs to stew and brew for a while."

The commission's original proposal envisioned allowing private insurers to compete with Medicare for elderly patients, hoping that the free market would drive down health care costs while improving services.

Prescription benefit

The commission's co-chairs, Thomas and Democratic Sen. John B. Breaux of Louisiana, made some last-minute adjustments to win over at least one of Clinton's appointees. Medicare patients with less than $10,568 in annual income would get prescription drug coverage. Higher-income recipients could buy insurance that would cover prescriptions.

To ensure that low-income and rural Medicare recipients are protected from high premiums, Breaux and Thomas included a provision mandating that no private insurer could cover less than 85 percent of health care costs. In rural and inner-city areas where the government's fee-for-service program might be the only option available, co-payments to doctors and hospitals could not exceed 12 percent of the costs of service.

But Breaux and Thomas refused to offer the universal prescription drug coverage that Clinton has demanded, a benefit that could cost $20 billion a year and nullify the savings produced by competition. And they dismissed as an accounting gimmick Clinton's proposal to use part of the surplus to fund Medicare over the next decade. Breaux said it would be throwing good money after bad.

"If you put more gas in a 1965 car, it still runs like a 1965 car," Breaux said.

A last-ditch effort by Democratic Sen. Bob Kerrey of Nebraska to bridge the gap fell short when Republicans rejected his suggestions, which he did not make public, as too costly. Kerrey had planned to discuss his proposals today on the Senate floor. But when his time was limited to just 10 minutes, he decided to talk about Social Security instead.

No agreement on competition

At the heart of the dispute is a fundamental disagreement over what Medicare needs to stay viable. Clinton health care advisers do not believe competition will yield the gains that Breaux and Thomas imagine. After all, one White House aide said, health care costs in the private sector are rising 30 percent faster than costs in the Medicare system.

White House advisers believe Medicare should be given more flexibility in its business practices to modernize the existing system. If that does not cut costs and improve services, competition could be tried later.

Proponents of more dramatic reforms said yesterday that they were not too disheartened. Whatever today's vote, Breaux and Thomas vowed to submit their proposal to Congress for passage. That may be a long shot, but it will start the debate, and none of the key players on the commission is likely to leave Washington anytime soon, Scully said.

"This is not the end of the process," Breaux vowed. "This is just the beginning of the process."

Pub Date: 3/16/99

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