Gop Abandons Medicare Hikes

Republican budget negotiators Monday abandoned a Senate plan to impose higher Medicare premiums on affluent seniors in the face of strong resistance in the House provoked by concern that Democrats would make an issue of it in next year’s campaign.

The decision to table “means testing” - along with two other Senate-passed proposals to raise the Medicare eligibility age from 65 to 67 and charge a $5 co-payment for certain home health care services - ended the Senate’s hope to use the balanced budget deal as a vehicle for enacting long-term changes to control Medicare costs.

Frustrated Senate Republicans blamed President Clinton for refusing to show leadership and for insisting on inclusion of what they deemed a “poison pill.”

While Clinton endorsed the means-testing concept, he insisted the Internal Revenue Service compute and collect the increased premiums - rather than leaving it to the Department of Health and Human Services, as called for in the Senate plan. With the IRS in charge, Republicans said, the premium increase would be mistaken for a “tax increase” and they refused to go along.

“I think the president killed means testing when he didn’t strongly come out in support of it at first and then added the poison pill of IRS collection,” complained Sen. Phil Gramm, R-Texas, a co-author of the proposal.

Although the American Association of Retired Persons and other labor groups opposed means testing, House Republicans needed little coaxing to block the plan. Many feared that by tampering with Medicare premiums, they would rekindle Democratic charges they were “cutting Medicare” to pay for tax cuts.

Also, many recalled that then-Ways and Means Committee Chairman Dan Rostenkowski, D-Ill., was literally chased down the street in his North Chicago district by angry seniors in 1989 after Congress approved a Medicare premium increase to finance new catastrophic health care benefits.

But even before negotiators could act, officials at the White House retreated to their original position that it makes more sense to consider means testing as part of a separate long-term effort to restructure entitlements after the budget agreement is complete.

“The White House was quite clear from the beginning, saying the issue of means testing was more appropriate to a long-term study of entitlements and Medicare in particular,” said White House press secretary Michael McCurry.