ALERT:: White House Backs Limits on Spending for Medicare

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: Tuesday, November 04, 2003 6:07 AM

White House Backs Limits on Spending for Medicare

 

 

>

> Medicare's growing reliance on general revenue imposed a mortgage

> on future generations. " Unlike the $87b. supplemental budget for

> Iraq.

>

>

> White House Backs Limits on Spending for Medicare

>

> By ROBERT PEAR

> 1d191f9.jpg

> Published: November 4, 2003

>

> 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, Joshua B. Bolten, and Tommy G. Thompson,

> 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 John M. Spratt Jr. of South Carolina, senior Democrat on

the

> budget committee.

>

> One of the two Democrats participating in the Medicare negotiations,

> Senator John 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?th