GOP bid to raise Medicare cost is behind impasse with Clinton It's timed to be masked in Social Security raise

November 15, 1995|By John B. O'Donnell | John B. O'Donnell,SUN NATIONAL STAFF

WASHINGTON -- At the heart of the stalemate that sent 800,000 federal workers home yesterday is the politics of Medicare, a campaign issue on which Democrats pin much of their hope of turning back the Republican tide in the 1996 elections.

President Clinton and congressional Democrats have been hammering on Republican plans to reshape the health care plan for the elderly, saying they want to "preserve" Medicare from the GOP onslaught. Polls show their criticism is beginning to bite.

In vetoing legislation that would have avoided the partial government shutdown, President Clinton criticized a provision that would have raised the Medicare premium that is deducted from the monthly Social Security checks of 36 million Americans.

"Millions of elderly couples all across this country would beforced to sign away $264 more in Medicare premiums next year, premium hikes that are not necessary to balance the budget," said Mr. Clinton.

Mr. Clinton didn't mention that he had proposed his own premium increase as part of his failed health care reform package and White House spokesman Michael McCurry wasn't anxious to get into it yesterday.

"That was part of a much larger design of health care reform," he said, "and I don't think we want to go through the whole history of health care reform now, do we?"

The GOP's proposed premium increase is critical to its tax cutting and budget balancing efforts. According to the Congressional Budget Office, the higher premiums would bring in an added $46 billion over seven years.

To some policy analysts, the GOP plans to have beneficiaries foot more of the bill for the increasingly expensive program make sense.

"The Republicans are basically proposing what is sound policy even though I think it's not very good politics right now," said Robert D. Reischauer, who headed the nonpartisan Congressional Budget Office when Democrats controlled Congress.

The GOP wants to increase the monthly Medicare premium -- which covers 31.5 percent of the cost of doctors' services -- from $46.10 to $53.50.

Insisting that they aren't raising premiums, the Republicans say their legislation would simply lock in the retiree's share of physicians' costs at 31.5 percent. The rest of the cost is covered by general government funds -- in effect, the deficit. The hospitalization part of Medicare is covered by the trust fund that is expected to be bankrupt by 2002.

Originally, the increase was included in the comprehensive tax and spending bill that is now taking shape on Capitol Hill, but Republican leaders decided to slip it into the temporary spending measure because timing had become crucial.

They want the increase to take effect in January, when the higher premium will be masked by the 2.6 percent increase in Social Security retirement benefits that also takes effect that month. Even with the higher Medicare premium being deducted, the average check that a Social Security recipient gets will be $11 more than it would have been in December.

The Social Security Administration told GOP leaders last month that it had to know the new premium amount by today if it was going to program its computers in time for an increase in $H January. Otherwise, agency officials said, it would be May before the increase could take hold.

Phil Gambino, an SSA spokesman, said yesterday the agency may be able "to push that back a few days and still get the checks out on time and in the right amount." He said the change involves 150 computer programs and writing 500,000 lines of code.

In the meantime, Social Security is programming the computers to lower the monthly Medicare premium in January. It will be reduced $3.60 to $42.50 under a 1990 law that will reduce the portion of physician costs covered by premiums to 25 percent from the current 31.5 percent.

If that reduction takes effect and is followed later next year by an increase in the premium to $53.50, there will be an $11 monthly reduction in Social Security checks that every recipient will notice. The $264 figure that President Clinton cited in his veto message Monday is the annual cost of the $11 monthly increase for two people.

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