House Votes Big Expansion of Medicare : Unlimited Days of Hospital Care, More Doctor Benefits OKd

The House Thursday overwhelmingly approved a major expansion in health care for the elderly, offering the 32 million Medicare beneficiaries unlimited days of hospital care, a ceiling on their personal expenses for doctors’ bills and partial payment for prescription drugs.

The vote was 328 to 72. Senate passage is likely soon, and President Reagan is expected to sign the bill, which would introduce the new benefits in stages over the next three years.

“We’ve brought you, Mom, peace of mind,” Rep. Pete Stark (D-Oakland), a key author of the bill, said after the vote.

The new benefits, the greatest expansion of Medicare since the program’s inception in 1965, are intended to protect the elderly against the massive medical bills that can occur when they suffer a catastrophic illness.

Strong Bipartisan Backing

The plan received strong bipartisan support in part because the new coverage would not exacerbate the massive federal budget deficit.

It combines “the best of social liberal benefits with the conservative fiscal budget neutrality,” Stark said.

The cost of the new benefits, estimated at $31 billion over the next five years, will be paid entirely by the elderly and disabled beneficiaries themselves. All will pay a higher monthly premium. In addition, the 40% with enough income to pay federal taxes will pay an income tax surcharge ranging up to $800 a year, or $1,600 for a couple.

Beginning in 1989, when a Medicare patient goes into the hospital, he will pay $564 for the first day and then will receive free care for as long as he remains there.

Some Left Destitute

Under current law, a Medicare patient pays $540 for the first day, receives the next 59 days free, and then pays $130 daily for the rest of his stay. The costs of extended hospital stays and other medical bills have left some elderly persons destitute, advocates of the legislation have said.

The new spending ceiling for the patient’s share of doctor bills would start in 1990. It features a multipart formula that limits a patient’s out-of-pocket expenses annually to $1,370. The current program pays a percentage of these costs but there is no limit on patients’ out-of-pocket expenses.

Prescription drugs will be covered by Medicare for the first time, starting in 1991. After the patient has spent $600, the government would pay 50% of additional expenses. In the next two years, the patients’ deductible would increase but the government’s share of the additional costs would be greater.

The new plan is a “good, reasonable and responsible agreement,” said Rep. Dan Rostenkowski (D-Ill.), who predicted its swift approval by the President after it is passed by the Senate.

Although it is called the Catastrophic Illness Protection Act, the legislation does not cover the most devastating financial threat for the elderly, the cost of a prolonged stay in a nursing home. Because of the high cost of nursing home care--averaging $22,000 per patient a year--Congress has been reluctant to include it in government-sponsored coverage.

However, the bill does provide some protection for the spouse of a person who must go into a nursing home. It would allow the spouse to keep $786 a month in family income to live on. The spouse would also be allowed to keep more assets than are currently allowed in many states before Medicaid, the federal health care program for the poor, begins paying nursing home costs.

Critics Voice Concerns

Critics of the bill continued to voice concerns about its financing mechanism. Rep. Judd Gregg (R-N. H.) said in the debate: “It is very difficult to oppose a bill with a motherhood title, as this one has.” But, he said, “this essentially is a tax bill on seniors.”

The monthly Medicare premium paid by all beneficiaries, now $24.80, would rise to $31.10 in January and would be revised each year to keep pace with inflation in medical costs.

The surtax for those with income high enough to pay income taxes would begin in April, 1990, for income earned during 1989. It would be an amount equal to 15% of the beneficiaries’ federal tax, up to a maximum of $800 for a single person and $1,600 for a couple.

The variable surtax would rise gradually, peaking at 23% in 1993, when the maximum payment would be $1,050 for an individual and $2,100 for a couple.

Nursing Home Costs

Elderly advocate groups intend to continue pressing for financial protection for nursing home costs.

In the meantime, however, they said the new plan offers significant help for those faced with the loss of their life savings in the event of an extended illness.

It is “a major step forward for the elderly, the disabled and the poor,” said Rep. Henry A. Waxman (D-Los Angeles), who helped prepare sections of the legislation.

Those receiving the greatest benefit will be the 2 million indigent elderly who live below the poverty level but earn too much to qualify for Medicaid benefits.

After a phase-in period, the program will pay all of these beneficiaries’ premiums and deductibles so they will receive totally free care.

Another group that is currently not included in the Medicare rolls--poor pregnant women and infants under the age of 1--also would receive new protection. Those living below the poverty level but currently unable to qualify for Medicaid would be automatically enrolled in Medicaid.

The new Medicare benefits were based on a proposal originally made by Health and Human Services Secretary Otis R. Bowen. The House vote was on a compromise plan.