Progress Made On Medicare Reform

Beyond the media spotlight, Congress has been making progress this year on one of the biggest issues in federal government: Medicare’s solvency.

Key congressional committees have approved several Medicare reforms and the White House seems supportive as well. The changes probably will be included in the federal budget later this year. The reforms would extend the solvency of the Medicare Part A hospital trust fund for 10 years, advocates say. They also would provide a big piece of the cost control needed in this year’s plan to balance the federal budget.

Few will lose sleep over one big-ticket item: saving $115 billion over five years by scaling back the growth rate in Medicare payments to hospitals and physicians. The medical industry’s income expectations have been extravagant, to say the least.

But Medicare beneficiaries will notice a premium increase from $44 a month to $66 by 2002.

And they’ll be offered choices in Medicare coverage. Until now, Medicare has stayed with the fee-for-service approach that largely has been abandoned in health insurance for working people. “Fee-for-service” means Medicare pays whatever care provider a patient chooses.

Under the reforms, senior citizens could choose the standard Medicare plan or pick from a new array of competing managed-care insurance packages with varying benefits and doctor groups. Doctors and hospitals themselves could organize as coverage providers. This raises a hope that coverage decisions will be influenced by the quality-of-care considerations that often pit doctors (and patients) against insurance industry bean counters.

Furthermore, on a pilot basis, 500,000 Medicare beneficiaries could shift to medical savings accounts; Medicare would buy them high-deductible health insurance and also would make deposits that would accumulate in the savings accounts. Patients presumably would spend the accounts wisely as they see fit.

Choice among competing insurance options has helped control costs in the private sector and in health insurance for federal employees.

Still, as life’s end nears and medical problems grow in number and seriousness, it becomes important to stay with physicians one has known and trusted. Medicare recipients can be pleased the program’s viability has been extended, but they’ll also be sure to scrutinize their new insurance options for the names of the care providers they trust.

, DataTimes The following fields overflowed: CREDIT = John Webster/For the editorial board