Brady Rejects Medicare Premium Cuts
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WASHINGTON — Treasury Secretary Nicholas F. Brady on Thursday rejected a proposal to reduce Medicare catastrophic health insurance premiums that congressional analysts expect will generate a bigger surplus than is needed.
Brady, in a letter to Sen. Lloyd Bentsen (D-Tex.), said the insurance program “is literally in its first few months of life” and the Bush Administration wants to be sure it is not left with insufficient reserves.
The new insurance program, approved by Congress last year, provides extended coverage for the costs of hospital and medical care and drug benefits. It is financed through a surtax paid by Social Security recipients.
Bentsen, chairman of the Senate Finance Committee, last week said he would move to reduce the surtax if the Treasury Department agreed with new congressional estimates that the surtax will yield a $9.1-billion surplus over five years.
Brady, however, said the Administration expects the premiums to yield “contingency reserves” of $6.2 billion.
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