Senate Panel Votes to Expand Medicare Aid

The Senate Finance Committee approved Friday a major expansion of Medicare benefits, making it virtually certain that significant new catastrophic health care coverage will be offered to the program’s 30 million recipients this year.

The committee action, coming on a 20-0 vote, set a $1,700 limit on patients’ annual out-of-pocket expenses for hospital and doctor bills and offered unlimited days of government-paid hospital care. Currently, there is no overall limit on how much Medicare patients must pay themselves for medical care each year.

Bentsen ‘Very Pleased’

“I am delighted, I am very pleased with the way it’s gone,” said Finance Committee Chairman Lloyd Bentsen (D-Tex.) after winning bipartisan support for his plan.

The measure would give Americans “greater confidence that they can count on Medicare when an unexpected illness strikes,” Bentsen said.

The House Ways and Means Committee has already passed a measure providing for a $1,500 ceiling on patient outlays. Since Democrats, who control the House and Senate, and President Reagan agree on the merit of the new benefits, the only debate now will be on what the patients’ payment limit should be and the method of paying for the change, the biggest since the program’s creation in 1965.

The Reagan Administration wants to set the personal spending limit at $2,000. All of the catastrophic care proposals, while differing in specifics, would involve higher premiums for recipients, who include those over 65 and 3 million disabled people.

The Senate plan, if it becomes law, would save money for the nearly 2 million Medicare beneficiaries who spend more than $1,700 a year on hospital and doctor bills. For about 900,000 of those people, the saving would be $1,000 a year or more.

Current Requirements

Current law requires Medicare recipients to pay $520 for the first day of hospital care. The next 59 days are paid by the government. After that, the patient pays $130 a day.

The Senate Finance bill, by contrast, would require the patient to pay only the first day’s charge, $520. Medicare would pay the full cost of all additional days in the hospital, regardless of how long the patient stayed.

Medicare would also pick up the cost of all physicians’ bills outside the hospital after the patients’ total medical expenses reached $1,700. Patients now pay 20% of those doctor bills outside the hospital and Medicare pays the rest, based on a fee schedule set by the government for specific conditions.

All of the proposed catastrophic care plans deal exclusively with expenses for physicians and hospitals. They do not address the biggest single personal expense of the elderly, the cost of nursing home care, which can run $2,000 a month or more.

Massive Deficits

The high cost of that care has discouraged Congress from considering the issue during an era of massive federal budget deficits.

“I believe we still are overlooking the true catastrophe facing American families--the long term, chronic care problems,” said Sen. John Heinz (R-Pa.), a committee member.

To address common misunderstandings among the elderly about that coverage, the Senate bill would require the Social Security system to send along with its benefit check a reminder that Medicare benefits do not apply to nursing home custodial care.

The expansion of Medicare benefits under the Senate bill would be financed by the beneficiaries themselves. Everyone would pay $4 a month, added to the current $17.90 monthly premium.

Premium Tied to Income

There would be an additional yearly premium based on recipients’ income. That charge would range from $12 for a person with an income of $11,700, to $800 for a beneficiary who makes more than $52,000. The income of 40% of the elderly would be low enough to exempt them from that extra premium. The Reagan Administration favors a uniform premium of $4.92 a month for all beneficiaries, with no provision for fees based on income. The extra premium in the House Ways and Means bill is linked solely to income.

Besides providing the added coverage, the Senate bill would allow the costs of two preventive procedures currently not covered by Medicare, colo-rectal examinations and mammograms, to be applied toward the $1,700 ceiling.

Some legislators in both houses are expected to try to add a prescription drug benefit when the catastrophic care bills are considered by the full House and Senate. Medicare now does not pay for drugs used outside a hospital. Rep. Henry A. Waxman (D-Los Angeles) is promoting legislation under which Medicare would pay all drug charges after a beneficiary had spent $400 for medication in a single year.