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Clinton Proposes Letting Medicare Fill Health Care Gap Plan Would Provide Coverage To Americans Younger Than 65

President Clinton proposed the largest expansion of Medicare in a quarter century Tuesday, offering to make Medicare available to Americans as young as 55 to assure health care coverage for an aging baby boom population that has been watching it slowly slip away.

Organized labor and consumer groups hailed the president’s plan. But their praise was tempered by fears that the proposal actually could accelerate a trend toward shrinking employer-provided health insurance in the United States.

“If this is set up so that insurance companies can dump all the people aged 55 to 64 from their health plans, it would be catastrophic,” said Gail Shearer, health care analyst for Consumers Union.

Others said that the increased premiums imposed by the plan would make Medicare coverage too expensive for most Americans who would be eligible.

The administration conceded that it’s possible more firms would be tempted to drop or reduce their health care coverage as a result of Clinton’s plan to make Medicare an option for many older workers under 65. But the White House said the proposal would close a big - and widening - gap in the U.S. health care system by making coverage available to many older Americans.

“Just at the time they most need health care, they are least attractive to health insurers who demand higher premiums or deny coverage outright,” Clinton said in making the proposal.

The proposal immediately drew a chilly reception from Republican congressional leaders.

“I think this is a proposal that is 99 percent politics and 1 percent public policy,” said Sen. Phil Gramm, R-Texas, chairman of the Senate subcommittee that oversees Medicare. “I think this is a movement in the wrong direction, and I don’t believe Congress is going to go along.”

Gramm said he was worried the plan could jeopardize Medicare - which faces looming insolvency in the next decade - by encouraging people to retire at an early age.

“If your mother is on the Titanic, and the Titanic is sinking, the last thing on Earth you want to be preoccupied with is getting more passengers on the Titanic,” Gramm said.

Democrats challenged those claims.

“It is disingenuous for any Republican to base their opposition on a claim that the buy-in proposal would cost Medicare money. It has been designed to be completely self-financing and will not affect costs for traditional Medicare beneficiaries or drain the program,” said House Minority Leader Dick Gephardt, D-Mo.

White House officials estimated that the plan would cost $2 billion to $3 billion over five years, which would be paid for with premiums charged to recipients and with savings from anti-fraud and waste proposals.

The proposal is aimed at three groups:

People aged 62 to 65 could “buy into” Medicare by paying a premium of about $300 per month until they reached 65, plus an additional $10 to $20 monthly premium once they reached 65 for every year of participation in Medicare before age 65. About 900,000 uninsured Americans are between 62 and 65.

People aged 55 or over who have lost health care coverage because they involuntarily lost a job would be able to buy into Medicare by paying a premium of about $400 a month. They would not have to pay the additional premium after age 65. About 700,000 people fall into this category.

Retired people aged 55 and over whose companies have reneged on commitments to provide retiree health insurance could buy into their former employers’ health plan through age 65 by extending the availability of COBRA insurance paid entirely by the employee. About 1.5 million people are in this category.

The administration estimates that out of all three groups, about 300,000 will participate in the Medicare expansion.

Health and Human Services Secretary Donna Shalala said one of the largest groups affected by the proposal would be unemployed women under 65 whose husbands are no longer privately insured because they receive Medicare.

Four years ago, Clinton’s effort to pass a comprehensive health care reform collapsed, and the president’s new proposal to expand Medicare is his third initiative in three years to reduce the nation’s burgeoning rolls of people who lack health insurance. Nearly 42 million people are uninsured, up more than 1.1 million from a year ago.

Two years ago, Congress passed the Health Insurance Portability and Accountability Act, which guaranteed private health insurance to workers who changed jobs and forbade insurers from denying coverage based on people’s health conditions.

Last year, Congress passed a $24 billion program to help states expand health care coverage for children.

“This is strategy two,” Shalala said, recalling the failed health reform plan. “We’re taking deliberate strategic steps to fill in the gaps where the health care system in this country is weak.”

Reaction to the proposal followed the familiar pattern of labor unions and elderly advocacy groups voicing support, while conservative and business groups voiced opposition.

The Health Insurance Association of America, which spearheaded the effort to scuttle Clinton’s health reform plan in 1994, offered subdued criticism of the new plan, saying “we should avoid relying upon government-run health care to do the job, especially a government program that already is under financial duress.”

The U.S. Chamber of Commerce and the National Association of Manufacturers both criticized the plan, as did Steve Forbes, a Republican presidential candidate in 1996 and possible candidate in 2000.

Meanwhile, the AFL-CIO, the American Association of Retired Persons, Families USA, and the National Committee to Preserve Social Security and Medicare offered varying degrees of support for Clinton’s plan.

Rep. Pete Stark, D-Calif., who last year introduced a Medicare buy-in bill for people over 55, said “I think the Republicans are going to have to sign on to this, and, if they don’t, it’s at their peril.” xxxx WHO BENEFITS? President Clinton’s Medicare proposal is aimed at three groups: Americans age 62 through 64 could buy into Medicare by paying a premium of about $300 a month - the average cost of insuring Americans. Workers over 55 who have involuntarily lost their jobs and their health-care coverage would be eligible for a similar Medicare buy-in at a cost of $400 a month. Workers over 55 whose companies reneged on promises to provide them with retirement health-care benefits would be allowed to buy into their former employers’ health plan through age 64. The cost will be about 125 percent of full insurance coverage.