Clinton, GOP Move Nearer to Medicare Solvency Deal

WASHINGTON — After years of bitter fighting over Medicare, the Clinton administration and the Republican Congress moved Tuesday toward a compromise that would extend the financial solvency of the health program for 10 years and offer new preventive care benefits.

The president and congressional leaders met at the White House and both sides talked in tones of conciliation.

“There really was a sense in the room that we can get this done and that we can work together despite the disagreements that do exist on some issues,” said White House spokesman Barry Toiv.

Rep. Bill Thomas (R-Bakersfield), prime author of the GOP Medicare bill, also voiced strong optimism, telling a news conference that “there are no areas that cannot be resolved in discussions with the White House and our Democratic colleagues.”

A key element of the recent balanced-budget agreement was a general commitment by the president and congressional leaders to achieve $115 billion in Medicare savings in five years. How those savings would be realized must be worked out in legislation approved by both houses of Congress. That process begins today in the House Ways and Means Committee, amid expectations for rapid bipartisan agreement.

The detailed GOP plan, offered Tuesday by Thomas, would assure financial solvency for Medicare’s hospital trust fund until the year 2007. Under current rates of spending, the fund headed for bankruptcy in 2001.

“I don’t believe there are any deal-breakers left out there,” said Thomas, after disclosing that his plan would limit medical savings accounts to a five-year experiment limited to 500,000 beneficiaries.

The savings account proposal combines health insurance with a tax-deductible savings account. The account was strongly opposed by the administration, which said that the special accounts would enable healthy, affluent elderly people to drain funds from the Medicare system.

Republicans favored the accounts as a way to give individuals choice over spending for medical care. But Thomas and the GOP leaders agreed to a limited trial of the concept, rather than making all 38 million Medicare beneficiaries eligible.

Toiv called Thomas’ proposal “a constructive step.”

The White House is accepting some favorite Republican ideas for expanding health care choices for Medicare patients--those 65 and over and the disabled of all ages.

The GOP plan would allow doctors and hospitals to create their own health maintenance organizations, bypassing the current HMO industry and insurance companies. The plan also would allow the new organizations under some circumstances to bypass state licensing and get certification from the federal government.

The new amity over Medicare is “remarkable,” said Edward Howard, executive vice president of the Alliance for Health Reform, a nonpartisan group. “It sounds like they are clearing the decks for the short-term stuff so they can fret about the long-term issues,” he added.

Looking ahead, the GOP plan calls for creation of a special bipartisan commission to figure out how to pay the health bills of 76 million baby boomers as they move into retirement. The oldest members of the biggest generation in American history become eligible for Medicare in 2011.

Thomas is chairman of the Ways and Means health subcommittee, and his frequent opponent on health issues is the ranking minority member, Rep. Pete Stark (D-Oakland).

But Stark had kind words Tuesday for Thomas’ handiwork, saying that “much of this bill is good for the Medicare program--for the Americans who rely on it now and for the generations who count on its future solvency.”

Stark, who opposes medical savings accounts, added, however, that “a few changes would make this bill easier to vote for and easier on our senior citizens.”

Progress on Medicare became possible after Clinton and the GOP Congress adopted a balanced budget as their primary domestic policy goal. A deal on Medicare is vital to that goal, because it is the fastest growing portion of the federal budget.

Medicare now accounts for $200 billion of the estimated $1.5 trillion in annual federal outlays.

The financial pain of the plan would fall on service providers, doctors, hospitals and HMOs, all facing slowdowns in the rate of growth in their payments from the government to care for Medicare beneficiaries. Lobbying on this issue is expected to be fierce, with each group trying to get Congress to reduce money to the other groups.

Beneficiaries also can expect to pay more. The bill would add another $6.80 a month beyond projected increases in Medicare premiums, which help pay for doctor bills. The premiums, now $43.80 monthly, would be an estimated $68.30 in 2002.

But beneficiaries also would enjoy a new package of preventive services.

Medicare would provide free annual mammography screenings for all women. For women deemed high cancer risks--those with family histories of the disease--there would be free annual pap smears and pelvic examinations. Women without high risk could get the free exams every third year.

For men, Medicare would cover annual screenings for prostate cancer.

Colorectal cancer screenings would be covered by Medicare for the first time. Medicare would pay for blood testing strips for diabetics and for training courses on diet and other lifestyle changes.

While Republicans were able to make peace with the White House on Medicare, they can expect more of a fight from Democrats on legislation designed to carry out the budget agreement’s welfare provisions.

House Republicans today will unveil a controversial proposal that, in effect, would allow welfare recipients to be paid less than the minimum wage when fulfilling their work requirements under last year’s welfare reform law, according to Democratic sources.

The House GOP proposal also would make changes in the budget agreement’s provisions for preserving welfare benefits for legal immigrants, who are facing a cut-off of benefits this summer.

Times Washington Bureau Chief Doyle McManus and staff writers Melissa Healy and Janet Hook contributed to this story.