NCPA - National Center for Policy Analysis

Medicare Panel Still Split On Reforms

March 2, 1999

The National Bipartisan Commission on the Future of Medicare is still split on reforming the health program for seniors, say observers. The commission missed a March 1, 1999, deadline for their report; but co-chairs Sen. John B. Breaux (D-La.) and House Ways and Means Health Subcommittee Chairman Bill Thomas (R- Calif.) have lined up 10 of the 11-members on the commission needed to propose market-based reforms to Congress.

Meanwhile, Democrats on the panel insist that Medicare's traditional fee-for-service program, which provides care to 85 percent of beneficiaries, should cover prescription drugs -- and some don't want to change the basic program.

Breaux wants to allow private insurers to bid competitively to offer a specific package of benefits, with seniors having a choice among insurers, similar to the Federal Employees Health Benefits Program. The federal government would provide "premium support" to purchase the insurance, with its costs capped at a specific amount.

  • Breaux proposes offering drug coverage through the Medicaid program to low-income Medicare beneficiaries, and requiring private Medicare supplemental insurance plans, called Medigap policies, to offer prescription drug coverage.
  • Higher income Medicare beneficiaries would pay a greater share of their premiums, while lower-income seniors' costs would be subsidized, and the eligibility age would be increased from 65 to 67 over a 24-year period.
  • Furthermore, he wants to institute a 10 percent copayment for home health services, and he would extend for a second five years the cuts in payments to health care providers included int he 1997 budget law.

The Health Care Finance Administration estimated Breaux's plan would save the government $347 billion to $372 billion over 10 years, not including prescription drug benefits. The commission staff's savings estimates were double those of HCFA.

Source: Mary Agnes Carey and Rebecca Adams, "Medicare Panel a Year Later: Deadlocked at Deadline," Congressional Quarterly Weekly, February 27, 1999.


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