In a last-ditch bid to get enough votes on his side, the chairman of the National Bipartisan Commission on the Future of Medicare last week proposed shelving his plan to increase Medicare premiums for higher-income beneficiaries.
A spokeswoman for Sen. John Breaux (D-La.) said he had not formally tabled the means-testing proposal, but it was one of the items in Breaux's Medicare-reform plan that might be extracted to garner support from 11 of the 17 commission members. Under 1997 law, 11 votes are needed to pass along a recommendation.
Another item that might be eliminated is a proposal to gradually raise the eligibility age to 67.
Both are part of Breaux's broader plan to restructure Medicare by transforming it from a bill-payer to a system that pays most, but not all, of seniors' premiums for private health insurance plans.
That proposal will be debated at a commission meeting expected to take place this week. The commission postponed a meeting set for last week.
Breaux's bargaining is not without peril. Under one scenario, Breaux's plan to more than double the Medicare premium for beneficiary couples earning more than $50,000 a year saves more money than any other single item in his restructuring plan.
According to HCFA actuaries, that proposal would save $95.9 billion between 2000 and 2009, or more than one-quarter of the total savings under Breaux's plan. Raising the eligibility age would contribute an additional $25.2 billion in savings.
If Breaux's plan loses those savings, the commission will have difficulty proposing a way to keep the program solvent through 2030. To ensure solvency, the proposal must include changes that will result in annual savings of $625 billion or more in 2030 compared with what's expected under current law. The commission projects Medicare will cost $2.2 trillion to $2.9 trillion in 2030.
Stuart Altman, one of President Clinton's appointees and one of two commissioners Breaux is courting to be the 11th vote, hinted that the loss of those savings makes his support less likely, because he doesn't think the commission's leaders are focusing on the program's long-term financial solvency.
Altman said he wants the commission to debate Clinton's plan to use $700 billion of the federal budget surplus to beef up the Medicare Hospital Insurance Trust Fund, now scheduled to be exhausted in about 10 years.
Leaving the means-testing proposal in Breaux's plan, on the other hand, could jeopardize Republican votes because it may require administration by the Internal Revenue Service. GOP members believe that could appear to be a tax increase.
Separately, two reports to Congress indicate Clinton's proposal to use 15% of the budget surplus to shore up Medicare could undermine current efforts at Medicare reform.
At a Senate Finance Committee hearing last week, officials of the U.S. General Accounting Office said in written testimony that Clinton's proposal "could very well serve to reduce the sense of urgency for reform."
The Congressional Budget Office agreed with the GAO that the Clinton plan would not address the underlying problem of the rapid growth in Medicare spending. Major Medicare reform is required to do that, according to the CBO.