Opinion Editorials

Oct 01 1995 -

Saving Medicare:

Beating Medicare

There is nothing more despicable than scaring innocent people for political gain. Yet, that is precisely the strategy of Democrats and interest groups intent upon derailing efforts to reform and save the Medicare program. They have engaged in a deliberate pattern of scare tactics, distortions and misrepresentations calculated to stir up opposition to needed Medicare reforms. Our nation's seniors deserve an honest bipartisan debate over how to preserve this vital program. The first misrepresentation being spread is that we are proposing to cut Medicare. In fact, under our plan, Medicare costs will increase at a rate of 6.6% per year. The purveyors of fear are upset that it will not continue to increase at the current rate of over 10% per year, about twice the rate of health care inflation. What we have proposed is to allow the program to grow at a slower rate. The average beneficiary who now receives $4,600 in Medicare benefits will receive over $6,700 in benefits by the year 2002. If we do not reduce that rate of increase very soon, the program will be bankrupt by that year. The second distortion is that the level of savings being proposed is greater than necessary to save the program, and that the savings are really being used to balance the budget and finance a tax cut. We based the need to achieve savings of $270 billion over seven years on the testimony of Guy King, Medicare's chief actuary from 1978-1994. This is the amount of savings necessary to put Medicare into long-term actu balance. It would be the amount necessary even if the federal budget was currently balanced and even if we were not proposing to give Americans desperately needed tax relief. It's outrageous that some have tried to use this issue to their political advantage, claiming that Medicare "cuts" are being used to pay for tax cuts. These are two entirely separate issues. A Washington Post editorial stated "Democrats have fabricated the Medicare-tax connection because it is useful politically. It allows them to attack and duck responsibility, both at the same time. We think it's wrong." I agree! There is no connection between the proposed reduction in Medicare growth and reduction in taxes. In fact, the Senate bill would make it illegal to use Medicare savings for tax cuts. The savings would have to go directly into the trust funds. The fearmongers are telling beneficiaries that we are substantially increasing their out-of-pocket expenses. What they are not saying, however, is that the Democratic plan raises out-of-pocket expenses by almost the same amount and yet does not even ensure long-term program solvency. The Clinton Administration has proposed Medicare premiums that increase from $44 per month in 1996 to $83 per month in 2004. The fact is that any plan that will truly save Medicare will require some increase in premiums. The Republican plan would ensure that the beneficiary's share of the premium will remain at its current level of 31.5% of program costs. The trustees of the Medicare trust fund have concluded that "Projections clearly demonstrate that Medicare is severely out of financial balance ..." The two trustees who are independent, private citizens and not members of the Clinton Administration have warned "We strongly recommend that the crisis presented by the financial condition of the Medicare Trust Funds be urgently addressed ..." Changes are clearly needed to ensure the solvency of the trust fund so that Americans may continue to receive their benefits. Thus, the question is not whether we should reform Medicare, but rather how we should do it. The Republican plan addresses this issue by expanding choices and competition in the Medicare program. Beneficiaries would have the option to maintain their traditional Medicare coverage or to choose from a wide variety of private sector plans. For example, beneficiaries may choose to receive care from a managed care plan in their area, such as an HMO or PPO, or they may prefer the Medical Savings Account approach that I have proposed which would give them full catastrophic coverage plus a savings account for other smaller or uncovered expenses. Whatever coverage they choose, the important thing is that the government is not telling them what they must have. In addition, the Republican plan includes substantial provisions to reduce Medicare fraud which is estimated to cost the program about $17 billion per year. At Medicare Town Meetings throughout Arizona, I have heard over and over from senior citizens that their Medicare bills frequently include services that they have not received, double billings for the same service, or charges that are disproportionate to the value of services received. This is why I introduced The Medicare Whistleblower Act of 1995, which would allow beneficiaries to receive copies of their itemized bills from providers, and if they discover inappropriate billings, to receive a small percentage of the overpayment recovered by Medicare. Thus, Republicans have proposed constructive ideas to save Medicare for current and future generations. Our plan entails some additional burden on all parties -- providers and beneficiaries -- but also additional choices and opportunities for all. Democrats have responded that we should put off the hard choices until later. However, "tomorrow" is not an acceptable answer. We must solve Medicare's problems today so that it is around tomorrow. Every day that we wait will make the challenge even more difficult. If we do not act soon, the only options available will be to increase the already onerous payroll tax or to reduce benefits. These are unacceptable options. We must work in a bipartisan manner to solve the Medicare problem. Leadership from the Clinton administration will be crucial. We invite the President and Democrats in Congress to contribute to a solution today. If they refuse, they should at least refrain from scaring beneficiaries from accepting needed changes. It is time that we start shedding more light than heat on this essential social issue.