Administration Opposes Change in Health Plan

The Bush Administration will oppose any congressional bid to repeal a controversial catastrophic health insurance program because a repeal would increase the budget deficit, a senior White House official said today.

William Diefenderfer, deputy director of the Office of Management and Budget, told the Senate Finance Committee that scrapping the program might cost between $4 billion and $7 billion in the first year alone.

“Any model I have seen for repeal would increase the deficit,” Diefenderfer said, “Therefore we have to oppose it.”

Firestorm of Protest

The Senate Finance Committee is considering a number of proposals to amend the 1988 Medicare Catastrophic Coverage Act that set up new protections for expensive long-term illnesses.

It has provoked a firestorm of protest among senior citizens’ lobby groups because of its requirement that recipients must pay for the plan. About 40% of higher-income recipients, those who pay at least $150 a year income tax, must pay up to $800 a person for coverage.

This so-called surtax, on top of the basic $4 monthly premium charged all recipients, has become the focus of the demands for reform or repeal.

The Finance Committee chairman, Sen. Lloyd Bentsen (D-Tex.), said it is clear that the catastrophic insurance program is “off to a rocky start” and needs change.

Opposes Premium Increase

“We are, of course, talking about something more than just a mild mid-course correction for the Medicare Catastrophic Coverage Act, though something less than repeal,” Bentsen said.

He said he would oppose any increase in the monthly premium for catastrophic illness coverage and seek a substantial reduction in the surtax paid by wealthier recipients.