Budget Highlights
Overall: Both bills save nearly $140 billion through 2002. This includes about $115 billion from Medicare, $14 billion from Medicaid, $5 billion from civil service benefits plus other savings. Both measures also increase spending in some areas, including expansion of children’s health-care coverage and food stamps.
Medicare choice: Senior citizens could enroll in new types of health plans beyond the traditional program, which pays bills one at a time, and health maintenance organizations. Options would include managed care plans run by doctors and hospitals and preferred provider organizations, which provide some of the advantages of HMOs but fewer restrictions. A limited number of seniors could open medical savings accounts, using their Medicare benefit to buy cheaper, high-deductible insurance and putting the extra cash in tax-exempt savings accounts.
Medicare payments: Premiums would rise by about $20 a month over five years under both House and Senate plans. Under the Senate plan, seniors making more than $50,000 would pay even more, with total annual premiums increasing about $32 for every additional $1,000 in income until hitting a maximum premium of $2,160 next year for those with incomes of $100,000 or more. The Senate plan would also establish $5 co-payments for home health care visits, which now are free.
Medicare eligibility: Under the Senate plan, the age of eligibility for Medicare benefits would gradually rise from 65 to 67 by 2027. It would remain at 65 in the House bill.
Rural Medicare: Payment formula changes would encourage HMOs to set up shop in rural areas, where managed care has yet to take hold.
Children’s health: States would receive money to provide health care for some of the nation’s 10 million uninsured children. The Senate bill provides $24 billion and requires states to use the money for health insurance. The House bill provides $16 billion and gives states greater flexibility to use the money for anything from insurance to direct payments to hospitals.
Immigrants: Legal immigrants who are not citizens would have some welfare benefits restored. Immigrants already in the Supplemental Security Income program could remain there. Under the Senate bill, immigrants who arrived before the welfare reform bill was signed last August could apply for SSI if they become disabled.
Welfare-to-work: States and cities would have $3 billion for programs moving welfare recipients into jobs.
Medicaid: Hospitals that serve large numbers of poor and uninsured people would see payments shaved by $15 billion.
Miscellaneous: Plan makes some public housing units available to some people with slightly higher incomes; gradually increases contributions by federal employees to their retirement system by 0.5 percent by 2001; trims some veterans’ benefits, including a $2 co-payment for prescriptions.