September 30, 1995 in Nation/World

Senate Panel Oks Massive Medicare Reform Reform Measure Headed To Senate Floor For Vote

Christopher Connell Associated Press

The Senate Finance Committee early today approved a Republican blueprint for massive changes in the government’s health programs for America’s elderly, poor and disabled.

The panel voted to overhaul Medicare and Medicaid to save $450 billion over the next seven years as part for the GOP’s program for bringing the federal budget into balance by 2002.

Before the 11-9 party-line vote, the committee decided to make 10 percent of senior citizens pay sharply higher premiums for their Medicare Part B coverage for doctor bills.

The Finance Committee directed that $71 billion be raised by raising premiums and deductibles for Medicare beneficiaries. Seeking to blunt Democrats’ charges that Medicare was being raided to fund tax cuts for the rich, the panel also voted to phase out taxpayer premium subsidies to single beneficiaries with incomes above $50,000 and couples with incomes of more than $75,000.

Sen. William V. Roth, R-Del., the chairman, said, “This is indeed an historic occasion. I believe this legislation will save Medicaid and Medicare.”

The action sends the sweeping health reform bill to the floor of the Senate for action. It was the first committee to act on both the Medicare and Medicaid reforms.

The House Commerce Committee has approved the Medicaid changes, but the Ways and Means Committee has delayed taking up its version of the Medicare changes until Oct. 9.

Earlier, in a concession to Sen. John Chafee, R-R.I., the panel voted to require states to keep covering poor children and pregnant women and the disabled even after Medicaid is turned over to the states in block grants.

The reforms would give Medicare’s 37 million elderly or disabled beneficiaries new choices of private health plans, including health maintenance organizations, while making them pay higher premiums and deductibles.

Medicare would be squeezed by $270 billion and its annual growth rate slowed from 10 to 6.3 percent. Seniors would be given new choices of private health plans, including health maintenance organizations and medical savings accounts, and strict limits would be clamped on how much Medicare would pay for medical services.

The monthly premiums of $46.10 now paid by beneficiaries would double by 2002. The premiums would go up even more sharply for affluent retirees. It would also make people 57 and younger wait longer to qualify for Medicare. The eligibility age would climb gradually from 65 to 67.

Medicaid, the health safety net for 36 million low-income children, families, elderly or disabled people, would be converted into block grants to the states, with virtually all federal rules and requirements thrown out.

Its growth would be cut from 10 percent-plus a year to 4.9 percent to save $182 billion.

Preserving Medicaid as a federal entitlement for poor children, pregnant women and some disabled beneficiaries was approved on a 17-3 vote after hours of behind-closed-door negotiations.

The bill would still freeze out all other federal health guarantees for the poor, and states would assume administration of the program entirely.

Except for continued mandated coverage of children, pregnant women and the disabled, states could spend block grants from the federal government as they wish.

Meanwhile, House Republicans finally released the text of their Medicare bill, along with preliminary word from the Congressional Budget Office that it would hit the $270 billion savings target.

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