GOP stresses choice in Medicare plans Republicans still split on details of savings goals

September 22, 1995|By LOS ANGELES TIMES

WASHINGTON -- House Republicans, still unable to agree on details of a plan to save $270 billion from Medicare over seven years, issued a general blueprint yesterday calling for expanded choices for beneficiaries, combined with tough government controls on payments to hospitals, doctors and health providers.

The GOP outline expressed confidence that millions of Medicare beneficiaries will save government revenue by moving into health maintenance organizations and other forms of managed care.

But the 60-page document did not offer dollar figures on how much of the $270 billion goal would come from managed care savings, and how much would be provided through higher payments by the beneficiaries.

Answer in 3 years

House Speaker Newt Gingrich, a Georgia Republican, admitted there is no way to know whether the GOP plan will in fact sharply increase membership in HMOs, which typically cost less than traditional fee-for-service medicine. "We will find out in three years who is right," he said, noting that the Congressional Budget Office may disagree with the GOP about the potential savings.

The House Ways and Means committee is scheduled to begin work on the bill next week. It is not clear when the full House will consider it. Senate Republicans are expected to make their Medicare plan public today. They also want to start work on it next week in the Finance Committee.

In a bid to blunt Democratic criticism that the savings will hurt senior citizens, Mr. Gingrich said total spending would rise every year under the GOP plan.

"This is an increase," he said emphatically. Costs have been climbing at a rate of 10 percent annually. The GOP plan would restrict the growth to 6.5 percent a year.

The government now spends an average of $4,816 a year for each Medicare beneficiary, a figure that would rise to $6,734 in 2002 under the GOP plan. A central issue, however, is whether $6,700 in 2002 will buy the same package of Medicare hospital and doctor services that now costs $4,900.

"Our mission is to preserve Medicare, to protect Medicare and to strengthen Medicare," Mr. Gingrich said at a news conference.

In response, Senate Democratic Leader Tom Daschle, a South Dakota Democrat, said the Republican proposal was a "cruel hoax" on seniors. And House Minority Leader Richard A. Gephardt, Democrat of Missouri, promised the "biggest fight and most controversial fight we've ever seen in Congress."

Democrats say the $270 billion in savings is far more than is needed to guarantee the solvency of Medicare in the short run, and they accuse Republicans of seeking money to finance tax cuts targeted heavily toward the rich.

What the plan would do

The leading provisions of the GOP plan would:

* Offer all beneficiaries a once-a-year selection from among several government-approved plans, including HMOs, or other networks of doctors and hospitals, or special Medical Savings Accounts. Under such an account, the government might spend $5,000 for Medicare coverage. The beneficiary could buy a low-cost, high-deductible policy for $3,000 a year. The other $2,000 would go into a savings account to be available to pay deductibles if the person gets sick or to be rolled over for next year if not used.

Beneficiaries who select none of those choices would remain in the current fee-for-service system, which allows them to select any doctor or hospital.

* Increase the monthly Part B premium paid by all beneficiaries for doctor services, now $46.10, to approximately $90 in 2002.

* Impose "means testing" on seniors making more than $75,000 a year, or couples with more than $125,000, and require them to pay more of their Part B coverage.

* Impose a limit of $250,000 for "pain and suffering," in addition to economic damages, for those who win malpractice suits.

The malpractice relief for doctors was designed to ease the burden of potentially drastic reductions in Medicare payments to physicians and hospitals.

Medicare spending, now about $170 billion, would be limited to a specific figure each year, reaching $280 billion in 2002.

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