Hill Democrats to offer own cuts in Medicare Minority party says it won't be as harsh as GOP

September 26, 1995|By LOS ANGELES TIMES

WASHINGTON -- In a major tactical shift, congressional Democrats are developing their own alternatives to the GOP Medicare reform plan to markedly soften the drastic changes sought by the Republican majority.

The House Democratic plan is being prepared primarily by Reps. Benjamin L. Cardin of Baltimore and Jim McDermott, a Washington state physician who played a prominent role in the health care debate of 1993-94.

The two men, members of the Ways and Means Committee, are finishing a 22-page alternative that is said to be gaining broad support among other Democrats on the panel. Mr. Clinton is scheduled to meet with them today.

For the nation's 37 million Medicare beneficiaries, the reversal suffered by Democrats all but ensures Congress will fundamentally restructure a Great Society program, with higher out-of-pocket costs and a distinct move toward managed-care delivery systems.

Although the plans are not complete, House Democrats are striving to limit reductions in future Medicare spending to $89 billion over 10 years.

In the Senate, Democrats are working to find a somewhat greater level of savings but still far less than would be required under the GOP's goal of $270 billion over seven years.

Development of the Democratic proposals is tantamount to a death-bed conversion. For months, they have been accusing the GOP of "cutting" Medicare to pay for a broad tax cut.

"We're telling our members: We don't have to fall into the Republican trap and be forced into doing things we don't want to be doing," one Democratic House staff member said yesterday.

Amid broad agreement that Medicare's hospital trust fund will be bankrupt by the year 2002, Republicans are proposing to save $270 billion in Medicare spending over the next seven years. The savings can be achieved, they say, largely by slowing the annual rate of growth in spending, from about 10 percent to just over 4 percent, and by channeling seniors into less expensive, managed-care settings.

Similarly, President Clinton says his less drastic plan would achieve $124 billion in Medicare savings, over 10 years.

Under both approaches, hospitals and physicians would encounter deep reductions in payments. And beneficiaries would pay more in monthly premiums for physician services -- about $90 under the GOP formula and $82 under Mr. Clinton's formula, by the year 2002.

The Democratic proposals are to be unveiled tomorrow -- the same day the Senate Finance Committee and the House Ways and Means Committee are scheduled to approve their Medicare reform proposals.

The Cardin-McDermott proposal would seek savings of about $89 billion over a 10-year period, according to sources. "We don't need to make drastic changes," one Capitol Hill staff member said yesterday. By moving more slowly to reform Medicare, he added, "We can ensure that quality and access are not diminished."

The Senate Democratic alternative is being drafted by David Kendall, senior health policy analyst at the Progressive Policy Institute, the research arm of the centrist Democratic Leadership Council.

The proposal is scheduled to be unveiled by Sens. Joseph I. Lieberman of Connecticut, who is chairman of the leadership council, Bob Kerrey of Nebraska and John B. Breaux of Louisiana.

As of late yesterday, Mr. Kendall said, the Senate proposal did not specify a savings amount. Ultimately, he said, it may achieve greater savings than the $124 billion proposed by Mr. Clinton -- largely by relying on competitive market forces. It also would sharply reduce payments to Medicare providers.

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