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Senate Votes To Raise Age For Medicare Wealthier Beneficiaries Also Would Pay Higher Premiums

Wed., June 25, 1997

Boldly tackling controversial Medicare reforms, the Senate on Tuesday upheld proposals to raise the eligibility age to 67 for baby boomers and charge the wealthiest beneficiaries higher premiums starting next year.

If they survive negotiations with the House and the Clinton administration, the Senate proposals would represent substantial changes for Medicare, which provides health insurance to 38 million elderly and disabled people.

“These changes will be truly worthy of being remembered,” said Sen. Phil Gramm, R-Texas. “We don’t do that very often around here.” Significant numbers of Democrats joined Republican majorities in supporting the changes.

All future beneficiaries would be affected by the higher eligibility age, which would be gradually phased in along with an increase in the Social Security retirement age that’s already law.

The most well-to-do 6 percent of today’s beneficiaries would pay the higher premiums, according to staffers for Sen. Bob Kerrey, D-Neb., a leading proponent. Individuals making $50,000 or more and married couples making more than $75,000 would be affected.

It’s not clear whether the Senate will prevail in the final bill. Groups representing the elderly are opposed. House Republican leaders are leery of making major changes in Medicare that might unleash a barrage of negative television ads. President Clinton is noncommittal.

“I don’t think Republican members of the House should be able to say that they know it’s right but they can’t do it because they’ll have a lot of ads running against them,” Kerrey said.

The vote to raise the Medicare eligibility came as a surprise. Just two hours before the vote, some supporters of were all but conceding defeat.

But the outcome was a decisive 62-38, with 12 Democrats joining 50 Republicans voting in favor of the higher age, and five Republicans and 33 Democrats voting against. Because of Senate rules, opponents would have needed only 41 votes to defeat the measure.

On the question of charging well-to-do beneficiaries higher premiums, the vote was an even more lopsided 70-30. Twenty-one Democrats joined 49 Republicans in supporting higher premiums, six Republicans and 24 Democrats voted to keep things as they are.

Senators also voted to charge themselves higher premiums under the federal employee health plan.

And in other Medicare action, the Senate retained a proposed $5 co-payment for Medicare home health visits. However, beneficiaries would pay no fee for the first 100 home health visits after a hospital stay.

Raising the Medicare eligibility age and charging higher premiums have been proposed in the past, but the debate this time was intense. Voices were raised, and motives were questioned.

The budget deal between Congress and President Clinton was supposed to avoid Medicare battles, buying time for a commission to grapple with such sensitive topics as the eligibility age, while it planned for the retirement of the baby boomers. But the Senate has forced all that into the open.

“Everyone wants us to fix Medicare, but no one wants us to do anything about it,” said Sen. John Breaux, D-La. “We raise the premium, they say no. We raise the eligibility age, they say no. We reduce payments to hospitals, they say no, it might lead to fewer services.”

Raising the eligibility age “is probably one of the easiest steps,” Breaux added. “If we don’t have the political courage to do this - how can we do anything?”

The age provision, cleared earlier by the Senate Finance Committee, would slowly raise the Medicare eligibility age from 65 to 67, in keeping with a gradual increase in the Social Security retirement age, phased in from 2003 to 2027. The impact would fall on baby boomers, not current beneficiaries.

That’s what upset Sen. Richard Durbin, D-Ill. “It’s about you,” Durbin told baby boomers watching on C-SPAN. “It’s about whether you have the protection of health insurance for your old age. Virtually everyone under 59 in America may have to change their plans on when they retire.”

Durbin said there should have been hearings and studies first. He said leading business groups like the U.S. Chamber of Commerce oppose the plan, because it would raise corporate health insurance costs. One study concluded it would raise the number of uninsured by 400,000.

But Finance Committee Chairman William Roth, R-Del., pointed out people are living longer. “This is a very modest approach to an extremely serious problem.” Medicare’s hospital trust fund is projected to go bankrupt in 2001, and major changes are needed to maintain the popular health care program when 78 million baby boomers begin retiring around 2010.

Currently all Medicare beneficiaries pay the same premium - $43.80 a month - for coverage of doctor visits and outpatient care. That basic premium is also projected to rise under the budget deal. But for upper-income retirees it would rise even more.

Individuals making more than $100,000 and married couples making more than $125,000 would pay a maximum premium of about $180 a month, according to Kerrey’s staff.

Money from the increased premium would be plowed back into Medicare. The Senate also added money to reduce the burden of increases in the basic premium on lower-income beneficiaries.

Raising the premium “is the right thing to do,” Breaux said. “We’re talking about people who are making $100,000 or more in retirement income. I’ve got constituents who are working for $25,000 a year, and paying taxes to subsidize Medicare for somebody making $1 million.”

But Sen. Edward Kennedy, D-Mass, warned: “Proposals to base the level of benefits or cost-sharing on income will pit senior against senior, undermining the strong base of support and seriously jeopardizing the benefits associated with Medicare.”

xxxx How they voted Here’s how Northwest senators voted Tuesday on charging higher monthly Medicare premiums for higher-income senior citizens and increasing the eligibility age for receiving benefits. Idaho: Republicans Larry Craig and Dirk Kempthorne voted “yes” on both measures. Washington: Republican Slade Gorton voted “yes” on both; Democrat Patty Murray voted “no” on both.


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