October 16, 1995 in City

Opponents Use ‘Scare Tactics’ About Medicare Changes

Rep. George Nethercutt Special To Roundtable
 

There’s been a lot of inflammatory rhetoric in the debate in Congress over Medicare. I’d like to clarify some of the facts about this important issue.

Critics charge that Republicans are “cutting” Medicare in order to give a tax cut to more affluent Americans. Nothing could be further from the truth. Whether it’s the media, the Democrats in Congress or the supposed “senior advocacy” groups, they are all using shameful scare tactics to muddle the debate on this critical issue.

By now, most Americans have learned that our Medicare program is going broke. The news comes from a report written by the bipartisan Medicare Trustees, which included three members of the President’s own cabinet. This report, filed in April 1995, clearly outlines to the President and Congress that the trust fund which pays for the medical services of 37 million seniors and disabled Americans will be out of funds in seven years. Since then, there have been many stories and tall tales of what this Congress will do to save Medicare.

Charges that the savings in Medicare will be used for tax cuts are patently false. Congress’ efforts to reduce the tax burden on every American family have already been paid for by savings in overall spending of government operations. Medicare and Medicaid are a separate trust fund and all savings realized under the Medicare Preservation Act will stay in the trust fund accounts to protect, preserve and improve this vital program.

The House Ways and Means Committee recently passed the Medicare Preservation Act (MPA), which increases Medicare spending per average beneficiary by $1,900 over the next seven years. This plan will also save Medicare from its impending bankruptcy, expand health insurance options for seniors, curb waste, fraud and abuse and most importantly, ensure that the program will be financially solvent through 2025.

Under the current proposal, the average per beneficiary federal spending will increase from $4,800 in 1996 to $6,700 in 2002. There will be no change in the current calculations for premium rates.

Here is how the proposal works. Every year, senior citizens will receive a form from the government listing a wide range of health care options. This form will offer the choice to stay enrolled in the traditional Medicare program or choose from several new private sector alternatives.

The new alternatives for seniors will include:

Coordinated Care Programs, such as Health Maintenance Organizations(HMO’s) and Preferred Provider Organizations (PPO’s).

Provider Service Networks, where groups of physicians or hospitals can band together and provide Medicare benefits without an intermediary insurance company.

Medical Savings Accounts (MediSave), in which each recipient would receive a high-deductible insurance policy along with a cash deposit in a Medical Savings Account that would cover a significant portion of the deductible. The money could be spent on a patient’s additional medical needs or to purchase long-term care insurance. The high-deductible policy would have no copayments, so recipients will be assured of a limit on out-of-pocket expenses. The money could even be used for non-health care expenses, although income taxes would be due on such account withdrawals.

These alternatives will allow each recipient to choose the best benefits package available in the marketplace. These packages could include coverage for outpatient prescription drugs, eyeglasses and hearing aids, none of which are part of the Medicare benefit plan, or a reduction in out-of-pocket expenses for co-insurance deductible. Those who make no choice will automatically be enrolled or re-enrolled in traditional Medicare, and the present system will continue for that recipient.

How will this plan save money and prevent Medicare from going broke? It’s easy. Private health care is more efficient and cost-effective than anything the federal government can run. Medicare costs grew at about 10.5 percent last year, while private sector health care costs decreased by about 1.1 percent.

Why should senior citizens be captive to an outdated, overly bureaucratic program, when they can take advantage of a wide range of options that can be tailored to their own individual health care needs?

Another important part of this new approach is greater emphasis on finding Medicare waste, fraud and abuse. We are including tough new anti-fraud provisions to save taxpayers money. Seniors who stay in traditional Medicare will even be rewarded for reporting fraud. This current plan requires that all private Medicare plans maintain a toll-free telephone number to receive billing complaints.

Most important, senior citizens will be able to keep their current physicians, and the federal government will not make such decisions. This system will remain sound for more that 19 years. Senior citizens will have a choice of doctors, of plans, and a health insurance plan that is secure now and in the future.

I am proud to be a part of a body that has finally found the courage to fix a problem it created through years of denial. Just as President Reagan and a Democrat Congress had the courage to fix an ailing Social Security system in the early 1980’s, this Republican Congress and a Democrat president are attempting to do the same. Last year, voters sent a clear message to Washington, D.C. that they wanted real change in the way the federal government spends our tax dollars. We are heeding that call in a responsible manner and no amount of bullying tactics by the defenders of the rapidly failing status quo will deter this Congress from this important challenge.

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