ALEXANDRIA, VaThe failure of the National Bipartisan Commission
on the Future of Medicare to issue a report resulted from complex
political calculations made by various players in the process.
Behind the political differences lies a legitimate difference
on the role of the government in health care, Washington
attorney John S. Hoff said at the 25th Annual Meeting of the
Association of Community Cancer Centers (ACCC).
The Commission and its non-report nonetheless constitute
the first step in something that will happen anyway, he
said, ie, movement toward a reimbursement system that better fits the
demographic, medical, and fiscal realities of the nation in the
The 17-member Commission missed by one vote achieving the
supermajority of 11 needed to report out a proposal that would have
combined elements of liberal plans to give the government more power
to contract for Medicare services with selected providers with
elements of conservative plans to provide beneficiaries a fixed sum
to buy their own private health insurance.
Based on the Federal Employee Health Benefit Plan, it would have
raised the age of eligibility, made drug coverage available for
everyone, provided free drugs for the poor, and combined Medicare
Parts A and B for funding and deductibles. As a premium support plan,
it would have maintained the basic commitment of the traditional
Medicare defined-benefit plan in a more efficient system.
Solvency of Parts A and B
Originally feared to be depleted in 2002, the Hospital Insurance
Trust Fund that supports Medicare Part A was made solvent until 2008
by cutting reimbursements for hospital costs, limiting home health
care, and transferring part of home health care to Part B. Part B,
however, is an open draw on general revenues, Mr. Hoff
The real issue, he said, is total spending, not the solvency of the
Trust Fund. By the year 2030, the present system, which now costs
$247 billion a year, would cost between $2.2 and $2.9 trillion, or
between 28% and 38% of the federal budget and between 6.3% and 8.5%
of the gross domestic product.
Medicare, if unchanged, he said, will consume two to three times as
great a share of resources as it does now, while providing benefits
that are already outdated because they do not cover long-term care
and outpatient drugs.
When established, Medicare provided open-ended payment for
anything doctors ordered, Mr. Hoff said. Attempts to control
spending over the years have produced todays complex of
fixed prices. Many people now support using market competition
rather than price controls to increase efficiency, and favor
government-funded private insurance in place of government control of
The premium support plan voted on by the Commission would have
reduced the current rate of spending growth by 12%, Mr. Hoff
said. It received the support of all the Commissions eight
Republicans and two of its nine Democrats.
The plan failed in large part because the White House signaled
that it had a different plan, Mr. Hoff said. In his State of
the Union message, Clinton announced a plan to save Medicare by
applying 15% of the budget surplus. Although this only bails
out Part A for a few years and does nothing to control
cost, Mr. Hoff said, the public thought it would solve
the overall problem.
When Clintons idea was criticized, the President said he would
not comment until he received the Commission report. Then, 2 hours
before the Commission voted, he declared that the Commissions
plan did not meet his principles and said he would produce his own
plan later this year. The Senate Finance Committee will likely
report out a Medicare bill this year, Mr. Hoff said, adding,
however, that passage by Congress is unlikely.