Advocates of changing Medicare to a system that helps beneficiaries buy private health insurance last week lauded a HCFA report that showed such an overhaul would save at least $75 billion over 10 years.
But despite that boost, the 17-member National Bipartisan Commission on the Future of Medicare appeared no closer to securing the 11th vote it needs to recommend such a change. Under a 1997 law, the panel was scheduled to make recommendations this week, but will meet next week.
Facing the prospect that he may be one vote short, Sen. John Breaux (D-La.), the commission's chairman, polled group members late last week to determine the potential for compromise.
Breaux wrote the plan that would change Medicare from a system that pays bills to one that provides "premium support" (See related story, p. 32).
The report from HCFA actuaries, released the day before one of the commission's final meetings, contained some of the best news yet for Breaux's plan. The premium-support model came under fire from some of Breaux's Democratic colleagues who believe it would not save money.
"If we come up with a wonderful plan that doesn't save money, we've failed," Breaux said in presenting the HCFA estimates to reporters. "I think the good news is, in fact, it does."
The report said Breaux's plan would save at least $346.6 billion over 10 years. That figure, however, includes $57.1 billion in savings from extending provider payment reductions through 2007. Those cuts were enacted in 1997 and set to expire in 2002. In addition, increases in hospital inpatient fees would be limited to less than the inflation rate.
Hospital lobbyists said the Senate Budget Committee, which is drafting a budget blueprint for federal fiscal 2000, is still considering extending those payment reductions. The House Budget Committee has ruled out extending payment reductions.
Democrats argued that the commission shouldn't rush to endorse Breaux's plan because most of its savings would come from items other than a move to the premium-support model. They said action on the plan should be delayed because of President Clinton's pledge to use $700 billion of the federal budget surplus to ensure Medicare solvency.
The HCFA report offered a contrast to the commission staff's estimate of savings under the premium-support model. Staff estimated savings of between $475 billion and $850 billion per year by 2030 but said there would be no savings from now until 2008, when the Medicare Hospital Insurance Trust Fund is projected to be exhausted (Feb. 22, p. 6).
The Congressional Budget Office would not estimate savings but said health plans' growing competition for Medicare dollars should reduce the government's costs.