Move To Revamp Medicare Signals A New Age
For years, it has been the question politicians have taken the greatest pains to avoid: Who will foot the bill for elderly health care and income support in the 21st century, when one in five Americans will be over the age of 65?
Suddenly and without warning, a powerful group of senators has forced the issue into the open. By voting this week to make the affluent elderly pay a lot more out of their own pockets and to force those currently 37 or younger to wait until they are 67 to get Medicare, the Senate Finance Committee has launched the debate long before most members of the Washington political establishment were prepared for it.
President Clinton and GOP leaders had hoped to finesse the question by appointing a commission that would report in 1999.
But the actions of the Finance Committee, whether or not its proposals become law, will crystallize arguments that could put different generations in fierce economic and social conflict.
The proposal was a remarkable departure from conventional politics - both in the idea itself and for the strong support it received from committee members of both parties.
The panel’s action has raised issues “that have not been on the table before,” said Robert B. Friedland, director of the National Academy on Aging.
Medicare and Social Security today consume about 7 cents of every dollar of goods and services produced in the mammoth U.S. economy. At current growth rates, the outlays will reach a staggering 13 percent of the nation’s economic output by the year 2025.
By that time, millions of baby boomers will be enjoying their retirement and collecting Social Security benefits while Medicare finances their new hips and hearts.
Will Generation X and other workers, the children and grandchildren of the boomers, be willing and able to pay the enormous tab?
Members of the Senate Finance Committee don’t think so - at least when it comes to health care. They want the elderly, particularly the affluent elderly, to bear more of the burden of health care.
The committee’s proposal would require single recipients with incomes of at least $50,000, and couples with incomes of $75,000 or more to pay the first $540 a year of their doctor bills before Medicare kicks in and pays 80 percent of approved charges. This represents a big increase from the current deductible of $100 a year paid by all 38 million Medicare beneficiaries, regardless of income.
The annual deductible would rise with income, reaching a hefty $2,160 a year when an individual makes $100,000 a year or a couple has $125,000 in income.
The key here is the principle, not the money. Fewer than 4 percent of Medicare enrollees have incomes of more than $50,000, and the proposed deductibles would raise less than $7 billion over five years. This is negligible compared with the $115 billion in Medicare savings over five years that is proposed in the balanced-budget deal between Clinton and GOP leaders.
But the change would be dramatic: Medicare, a social insurance program that protects the rich and poor alike, would begin distributing money on the basis of income.
That approach is anathema to the senior citizens’ lobby, the labor movement and liberal Democrats, who view it as a threat to convert the program into a welfare system.
Yet the Finance Committee will have achieved its goal even if its plan never becomes law; it will have touched off a debate on the premise that Medicare is a sweet, but perhaps unsustainable, program threatened by a combination of increased longevity, the boomer bulge and expensive advances in medical technology.
xxxx A sliding scale The plan would increase the annual Medicare deductible from $100 to $540 for single recipients with incomes of at least $50,000, and couples with incomes of $75,000 or more. The deductible would rise with income, reaching a hefty $2,160 a year when an individual makes $100,000 a year or a couple has $125,000 in income.