Pound of Flesh

The inspector general of the Department of Health and Human Services has recommended deducting bad debts for Medicare hospitalizations from the debtors’ Social Security checks. The suggestion is, at best, premature--and, at worst, callous and careless.

There is a substantial amount owed each year by elderly Americans who fail to pay the $492 deductible charged for each hospitalization under Medicare or who fail to pay the co-payments that come into effect after the first 60 days of hospitalization. In the last year for which figures are available, fiscal 1984-85, bad debts totaled $199 million. That is a lot of money. But as a proportion of Medicare hospital benefits paid that year it is remarkably small--less than one-half of 1%.

Richard Kusserow, the inspector general, limited his compassion to a suggestion that the deductions from Social Security checks for the collection of hospital debts could be spread over several months if a single charge “would cause an undue financial hardship.”

In fact, the Department of Health and Human Services did not know, when Kusserow made his proposal, who owed what. Some of that bad debt is owed by states as their share of Medicaid (Medi-Cal in California), which overlaps Medicare for some low-income seniors. No study has been made of whether the debts have been the result of financial hardship or defiance. But a survey by the department has uncovered the significant fact that 95% of the Medicare beneficiaries pay their hospital debts promptly--a record probably unequaled by any other group with obligations of any sort to the federal government.

There is good reason to believe that the inspector general’s proposal will go nowhere. The good reason is Dr. Otis R. Bowen, secretary of health and human services, who is hard at work seeking to remedy the pinches on Medicare protection that have been imposed by both Congress and the Administration.

Just last month Bowen recommended a program that would resolve the problem of high hospital expenses for most Medicare beneficiaries through a catastrophic health-care insurance supplement that would be available for less than $5 a month. That would go a long way toward restoring the peace of mind intended for older Americans when Medicare was first implemented.