Leading Medicare reform initiatives suffered punishing blows last week when federal government reports questioned how they would be paid for.
Congress shouldn't add outpatient prescription drugs to the Medicare benefit package without first finding savings to offset the increased costs, David Walker, comptroller general of the General Accounting Office, told the Senate Finance Committee.
Congressional Democrats have begun pushing for a vote on a stand-alone bill adding prescription drugs to the array of benefits for which Medicare pays. Earlier this month, they filed a motion seeking to bypass committees and bring the legislation straight to a vote by the full House.
The Congressional Budget Office has yet to release a cost estimate for that legislation. But the White House estimates its plan to cover prescription drugs will cost $28.8 billion over five years.
Republican congressional leaders also have appointed a task force to produce a prescription drug plan.
Clinton could use the testimony of the GAO, a congressional watchdog, to justify his call for Medicare payment restraints contained in his budget plan. He proposes $17.4 billion in provider payment reductions over five years.
One hospital lobbyist criticized the White House plan. "They've always claimed their plan is reform, but reform is in the eye of the beholder," said the lobbyist, who asked not to be named.
Walker slammed Clinton's proposal to divert $400 billion of the federal budget surplus over 10 years to extend the life of the Hospital Insurance Trust Fund to 2025 and help pay for the drug benefit.
That diversion "would constitute a new claim on the general fund that would limit the ability to set budgetary priorities in the future," Walker said. It also would mask erosion of trust fund revenues, preventing lawmakers from acting quickly to shore up finances.
Meanwhile, HCFA's actuary office released an analysis of another reform plan, authored by a bipartisan Medicare commission. It showed the plan would increase beneficiaries' Part B premiums by up to 47%.
"I think that would effectively kill off that proposal in its current form," said John Rother, legislative director of the American Association of Retired Persons.
Sens. Bill Frist (R-Tenn.) and John Breaux (D-La.) have drafted legislation based on the commission's plan. The actuary's office has not completed an analysis of the legislation.