CLINTON OFFERS GOP TRIMMER MEDICARE PLAN.

Byline: Knight-Ridder Tribune News Wire

On the first working day of his second term, President Clinton unveiled Medicare reforms as a peace offering in his budget war with the Republicans who control Congress.

``I want to meet them halfway on this and on many other issues,'' Clinton said as he opened a meeting Tuesday with his economic advisers.

Clinton's new Medicare plan would trim $138 billion from projected spending over six years, compared with $124 billion in his last plan. Most of the extra savings would come from reduced payments to health maintenance organizations (HMOs).

For beneficiaries, there are pluses and minuses. The plan would expand preventive coverage and institute some new consumer protections, but premiums would rise more rapidly in the long run.

Hospitals, doctors and nursing homes would have to make do with less from Medicare. HMOs probably would eliminate some additional benefits they now offer to attract Medicare patients, such as free health club memberships.

John Rother, senior lobbyist for the American Association of Retired Persons (AARP), called the proposal ``pretty aggressive, but within the range of what is doable.''

Reaction was positive from top Republicans, including Rep. John Kasich of Ohio, chairman of the House Budget Committee, and Rep. Bill Archer of Texas, chairman of the House Ways and Means Committee, which must approve any Medicare changes. Archer, who recently had a private meeting with Clinton, would like White House cooperation on his tax-cutting agenda.

``This is a very positive and significant development. I praise the president for it,'' Archer said, adding that he would ``withhold final judgment until I see the details of the president's budget.''

Balancing the budget by fiscal year 2002 is now Clinton's top priority, and these Medicare proposals will highlight the balanced-budget plan he intends to unveil Feb. 6.

``The only way we can actually balance the budget is if we seize this moment to work together, and I'm going to do my best to reach out to Republicans,'' Clinton told his advisers, amplifying the bipartisan theme that has become the hallmark of the opening days of his second term.

Clinton is prepared to move even further toward GOP positions, top aides suggested. ``The president is laying out his opening offer,'' said Donna Shalala, secretary of health and human services.

This all marks a dramatic change in political tone. Clinton vetoed a Republican budget in 1995 that included $270 billion in reduced Medicare spending, and he savaged more moderate GOP proposals later as too ``extreme'' throughout his re-election campaign.

Republicans charged Clinton with waging a ``Mediscare'' campaign through 1996, and heavy support from elderly voters helped Clinton carry retirement centers Florida and Arizona on Election Day.

Clinton's Medicare plan relies on cuts to HMOs, hospitals and doctors for the bulk of its savings. For beneficiaries, it would raise the Part B premium for coverage of doctor visits, beginning in 1999. However, it also would improve basic benefits. And it would take modest steps to bring Medicare into the age of managed care.

Clinton's plan would extend the solvency of the Medicare hospital trust fund by five years, to 2006. That would buy breathing room, but not solve the problem of preserving Medicare for the baby boomers. The president is calling for a bipartisan commission to tackle that issue.

For beneficiaries, Clinton's plan would permanently set the Part B premium (now $43.80 a month) to pay 25 percent of the total bill for Medicare's coverage of doctor visits.

That's the share of program costs that the premium now covers. But under current law, the share would begin to drop in 1999, lowering future premiums for beneficiaries.