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Medicare: no peace do we find.

A few issues ago we wrote in this column that Washington seemed to be talked out and legislated out on the subjects of financing Medicaid and Medicare. The Balanced Budget Act of 1997 appeared to have finally put to rest all the issues that could and would be agreed upon, while saving further change to be addressed by the new 17-member bipartisan Medicare Commission. It seemed that, at least for a while, a truce had been declared on all further Medicare debate.

And a short-lived truce it was.

Senator Phil Gramm (R-TX) didn't even wait until the new year. Before Congress reconvened, Senator Gramm predicted that the healthcare debate would "reignite" this year. While acknowledging the Medicare Commission (of which he is a member), Gramm declared that "rebuilding our Medicare and Social Security systems is the greatest domestic challenge that America faces." He warned that "dramatic reform of the financing mechanism is the only real hope we have of preventing a tax explosion, an economic implosion or a wholesale default on Medicare benefits."

Senator John Kyl (R-AZ) also continued to pressure members of his party to reexamine how the Balanced Budget Act of 1997 addressed Medicare. Senator Kyl noted that most of the savings called for will be derived from reductions in provider reimbursements. He argued that this is both unfair and inadequate to meet a rapidly approaching crisis in the system. Kyl recited data indicating that, while there were 3.5 workers generating payroll taxes for every beneficiary of Medicare Part A (the Medicare section funded via Social Security), by the year 2030, there will be only 2.2 such workers - unless something dramatic is done to change the financing system.

Many respected analysts of healthcare financing maintain that these conservative warnings are exaggerated. Yale University professor Theodore Marmor, author of The Politics of Medicare, notes that some European countries that have already experienced a tsunami of retirees did not encounter skyrocketing healthcare costs as a result. As Marmor and colleague Jonathan Oberlander wrote recently, "The point is not that demographic changes exert no influences.... Rather, it is that international experience is too variable to assume that demography is destiny."

Not one to let the matter rest either, though, President Clinton in his State of the Union Address proposed a new national discussion on the future of Social Security. "We'll start by conducting nonpartisan forums in every region of the country," President Clinton said, "and I hope that lawmakers of both parties participate. We'll hold a White House conference on Social Security in December. And one year from now, I will convene the leaders of Congress to craft historic bipartisan legislation to achieve a landmark for our generation: a Social Security system that is strong in the 21st century."

Thus, while the Medicare Commission is meeting, there will be parallel public discussions going on throughout the country, if the President has his way. He also went on, in the same speech, to propose allowing uninsured Americans aged 55 to 65 to "buy into" Medicare.

President Clinton is not the only political player seeking to legislate an expansion of Medicare. The American Health Care Association (AHCA) introduced last year a long-term care financing proposal - SecureCare - that would shift reimbursement for nursing homes and assisted living from Medicaid to Medicare, which already picks up much subacute care and home health care. In effect, SecureCare would "nationalize" long-term care for the Medicare-eligible, leaving the states responsible for the long-term care of the younger, poverty-level population. To reduce the burden on Medicare, SecureCare relies on extensive expansion of private long-term care insurance.

Henry J. Aaron and Robert D. Reischauer of the Brookings Institution, a generally liberal-leaning nonprofit "think tank" in Washington, agree with AHCA that Medicare does not cover enough essential healthcare services for the elderly. Their justification for a renewal of the debate over Medicare financing is that "Medicare's benefit package is inadequate and the prospects for improving it under the current program structure are poor." They want the national discussion over Medicare reform to include decisions on more comprehensive benefits and fundamental structural change.

And - surprise - analysts from the conservative Heritage Foundation agree, at least to the extent that the Medicare discussions should go beyond simply its financing sources. Heritage Foundation vice-president Stuart Butler wrote recently that "the phony debate over trust fund balances and budget savings has for too long obscured the fundamental questions at issue."

Thus, all of the parties with a significant intellectual stake in the future of Medicare have launched their opening arguments in the ongoing - possibly never-ending? - debate on what Medicare should cover, how it should be financed and what approaches should be taken to prevent costs from bankrupting the system. The Medicare Commission, brand new though it is, appears to be taking on the pallid role of a sideshow, or at least a convenient place to tuck away concepts that are temporarily too hot to handle. As the debate continues to boil in Congress and move out into the public-at-large, the notion grows that maybe it was a mistake to announce that for Medicare, "peace is at hand," before any side had run out of ammunition.
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Title Annotation:legislators' continued debates on Medicare
Author:Stoil, Michael J.
Publication:Nursing Homes
Date:Mar 1, 1998
Previous Article:Stepping into the breach.
Next Article:A somewhat scary tour.

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