Major Medicare Expansion Approved by House Panel

The House Ways and Means Committee approved Thursday a major expansion of Medicare, offering the nation’s 30 million beneficiaries unlimited days of government-paid hospital care and a $1,520 limit on their annual out-of-pocket expenses for doctor and medical bills.

Chairman Dan Rostenkowski (D-Ill.) also announced that legislation will be prepared to have Medicare pay for prescription drugs for the first time.

“We can go before the House and the public with the biggest and most important expansion of the Medicare system in more than 22 years,” said Rep. Pete Stark (D-Oakland), chairman of the health subcommittee that prepared the legislation.

The committee’s plan goes beyond the catastrophic care program proposed by the Reagan Administration, which would also offer unlimited hospital care but which would require patients to pay the first $2,000 in hospital and doctor bills.

The Senate, meanwhile, is preparing its own version of the legislation.

Adoption of some form of additional catastrophic care coverage is considered likely this session because of Reagan’s outspoken support for the idea.

The current system requires that beneficiaries of Medicare, the government health program for the disabled and those over 65, pay $520 for their first day of hospital care each year. The next 59 days are free, and the beneficiary pays $130 a day after that.

If the Ways and Means Committee plan is adopted, the patient’s personal cost for hospitalization would be limited to $520 annually. Any additional days would be fully paid by the Medicare system.

For doctor bills, the patient now pays 20%, and Medicare pays 80% of an approved fee schedule. If the doctor charges more than the standard fee, the patient must pay the difference.

Under the Ways and Means plan, the patient would continue to pay 20% of the bills, but only until his personal payments reached $1,000 for the year. At that point, Medicare would pay the rest. The patient would still be responsible for the charges by doctors in excess of the Medicare fee schedule.

Rep. Henry A. Waxman (D-Los Angeles), chairman of the health subcommittee of the House Energy Commerce Committee, said that adding new coverage for prescription drugs in a separate measure would “put a Democratic imprint on catastrophic care legislation.”

Some Forced Into Choice

People with chronic diseases, such as severe arthritis or heart problems, are “often forced to choose between buying drugs and other essentials of life, such as buying food or paying the rent,” he said.

Waxman would not provide specific figures, but sources said there has been discussion of setting a deductible of $500 for prescription drugs. Medicare enrollees would pay drug expenses up to $500 in a year, and any additional costs would be paid by the federal government.

The additional hospitalization and doctor bill benefits in the Ways and Means Committee plan would be financed entirely by a premium linked to beneficiaries’ income. The premium would be paid annually along with federal income taxes, so the new benefits would be free to the 50% of the elderly who pay no federal taxes.

For those who do pay taxes, the premium would range from $3 a year for incomes up to $10,000, to $528 for those with incomes of $75,000 or more.

All Medicare beneficiaries would continue to pay the current premium of $17.90 a month for doctor bill coverage.

“This legislation will provide 30 million Americans with insurance protection against the overwhelming financial burden of catastrophic hospital and physician expenses,” Rostenkowski said. “The President’s support for a similar program was an important first step in this process. “