Higher Premiums Seen as Essential to Save Medicare

America’s seniors must begin to pay a larger share of their health-care costs if Medicare is to remain solvent, the chairman of the congressional committee that is striving to overhaul Medicare said Friday.

Rep. Bill Thomas (R-Bakersfield) said it is up to Republican lawmakers to deliver that message by imposing additional costs on Medicare beneficiaries in return for adding prescription drug coverage to the program.

Thomas spoke to reporters at the end of another negotiating session attended by House and Senate lawmakers, Bush administration health-care officials and congressional aides. The conference committee has been working since July to forge a compromise between House- and Senate-passed versions of legislation that would add prescription drug coverage to Medicare.

“The current program is not sustainable,” Thomas said repeatedly, referring to a government trustees’ report released this year that predicted the Medicare trust fund for hospital expenses would go broke in 2026. Given that, he said, adding a $400-billion drug benefit to the program without finding a way to control government costs would be “fiscally irresponsible.”

In an effort to keep Medicare afloat, negotiators are likely to agree to make wealthier seniors pay more for outpatient services, index Medicare premiums to inflation and require traditional Medicare to compete with private health plans, Thomas said.

“All of these very difficult decisions are being faced by a Congress controlled by Republicans on both sides,” he said.

Thomas’ remarks revealed few specifics of his committee’s movement toward a compromise Medicare bill. But coming at the end of another week of partisan wrangling over a prescription drug benefit, they signaled his determination to produce a bill that includes some form of Medicare privatization and increased cost-sharing by beneficiaries, provisions strongly opposed by Democrats.

“One of the costs of getting [a final bill] is to address the long-term insolvency of the Medicare program,” he said.

In a letter to President Bush, 41 senators -- including one Republican and an independent--said Thursday that “a restructuring of Medicare that could raise the premiums of the elderly and coerce them to join HMOs, PPOs, or other private insurance plans is unacceptable.”

One of the two Democratic lawmakers Thomas has allowed to attended committee meetings said Friday that he expected a controversial House-passed competition provision to be dropped from the final bill.

“The 800-pound gorilla has not been wrestled to the floor,” said Sen. Max Baucus (D-Mont.).

Sen. Charles E. Grassley (R-Iowa) confirmed that lawmakers had not really tackled the competition issue. But House Republicans predicted that a final bill would include some form of private competition.

Conferees said earlier in the week that they would produce a draft agreement by Friday. On Friday, Thomas predicted a final agreement by the middle of next week.

The House and Senate could vote on a final Medicare bill in mid-November.