Key House Panel Oks $270 Billion In Medicare Cuts Ama Endorses Proposal After Gingrich Reduces Amount Doctors Will Absorb

THURSDAY, OCT. 12, 1995

The House Ways and Means Committee, split angrily along party lines, approved a Medicare package Wednesday that Democrats called a gift to doctors and Republicans touted as the medical program’s salvation.

The historic plan would reduce projected Medicare spending by $270 billion over seven years and is expected to get to a full House vote next week.

“We have saved Medicare” from future insolvency, Ways and Means Chairman Bill Archer, R-Texas, told reporters after the committee’s 22-14 approval of the GOP package. “Instead of quick fixes,” he said, the plan is a rational, long-term transformation of Medicare.

The House Commerce Committee worked into Wednesday night, hoping to complete its portion of the Medicare overhaul. The panel’s hearing was disrupted when members of the National Council of Senior Citizens staged a demonstration, shouting questions at the committee. Several of the elderly protesters, some in wheelchairs, were escorted out by police.

The House GOP plan gained important strength when Speaker Newt Gingrich, R-Ga., announced that the American Medical Association had endorsed it. The support came after Gingrich adjusted by an unspecified amount the reductions doctors would absorb in reimbursements.

Rep. Fortney “Pete” Stark, D-Calif., said Gingrich was “calling the tune” for Archer’s committee and he called the speaker’s deal “despicable … underhanded.”

Rep. Gerald Kleczka, D-Wis., said it was “a gift that was given to physicians” that could mean billions of dollars. Republicans disputed that estimate and said the provision is worth only hundreds of millions.

President Clinton, who has proposed $124 billion in savings in Medicare over seven years, has said he will veto the GOP plan.

The House Republican blueprint would provide savings largely by squeezing medical providers, such as hospitals and doctors. It would also raise beneficiaries’ monthly premiums from the current $46 to about $87 in the year 2002. Under current law, the monthly premiums would rise to about $61 and under Clinton’s plan to about $83.

The GOP proposal would also sharply increase premiums for affluent seniors.

It envisions that seniors will be lured to a host of managed care plans, hospital physician networks and medical savings accounts. The savings would be realized because the federal government would contribute a fixed amount annually to these plans.

Republicans said their plan would save the Medicare program from bankruptcy and provide the elderly the kind of health care choices now available in the private sector.

But Democrats said the Ways and Means bill would take far more out of Medicare than is needed to rescue it from financial insolvency. The Democrats contend Republicans want to use the savings from Medicare to cover $245 billion in tax cuts.

To blunt that contention, the committee approved an amendment specifying that Medicare savings would be put back into the program. Democrats dismissed the move as budget gimmickry.

To demonstrate the benefits of their plan, Republicans used Rep. Sam Johnson, R-Texas, who turned 65 Wednesday, as a symbol.

As Johnson proudly showed off his Medicare card at a news conference, his GOP colleagues presented him a mock check for $4,800, the estimated amount the federal program spends on each beneficiary. Republicans say that figure would increase to $6,700 by 2002, under their reform plan.

Democrats, however, charge that the GOP proposal would herd seniors into managed care plans where they would receive inadequate medical attention. Republicans countered that their proposal does not force anyone out of current plans, and would ensure adequate protections to anyone who joined a health maintenance organization.

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