Catastrophic Care May Be Close to Repeal Due to Opposition by Elderly Over Surtax

Responding to pressure from angry elderly voters, congressional leaders said Tuesday for the first time that the Medicare catastrophic care program may be on the verge of repeal.

“There’s a lot of support for repeal,” said House Majority Leader Richard A. Gephardt (D-Mo.). “I believe the elderly want changes in the way the system works.” House Majority Whip William H. Gray III (D-Pa.), said: “There’s a lot of frustration out there . . . . (Repeal) could happen.”

Although many members of the House had indicated that repeal of the program is possible, the remarks by Gephardt and Gray were the first admissions by Democratic leaders that they may be unable to save it. The program--the largest expansion in Medicare benefits in 23 years--was overwhelmingly approved by Congress last year.

Revolt Over Surtax

But the financing of the benefits, through premiums and taxes paid exclusively by Medicare beneficiaries, prompted a revolt among people over 65. They are particularly angry about a surtax, ranging from $22.50 to $800 a year, that would be paid by Medicare beneficiaries who earn enough to pay federal income tax.

A repeal vote could come as early as next week on the House floor. The House will be considering budget legislation for the 1990 fiscal year, and an amendment to repeal catastrophic care might be offered. Even if there is no vote then, opponents of catastrophic care will keep pressing the issue until they can bring it to the House floor.

Meanwhile, the Senate Finance Committee, struggling to save catastrophic care by defusing the anger of the elderly, Tuesday began considering a plan to cut the surtax rate--to 12% from the current 15%--and to reduce the maximum from $800 to $585.

Sen. Lloyd Bentsen (D-Tex.), the committee chairman, said catastrophic care has “basic elements certainly worthy of trying to preserve.” Catastrophic care includes unlimited days of hospital care after the patient pays for the first day, a cap on out-of-pocket spending for doctor bills and coverage of prescription drugs for the first time.

The plan being considered by the Finance Committee would curtail benefits to compensate for the loss of revenues that would result if the surtax is cut. The proposed ceiling on an individual’s payments to doctors would climb to $1,780 from $1,370, and the cap would be delayed a year until 1991. The skilled nursing care benefit, which has been liberalized this year, would be sharply restricted again by imposing a waiting period of three days in the hospital before a patient can enter a nursing home.

Last Thursday the House Ways and Means Committee passed a bill that would change the catastrophic care program by cutting in half the surtax but boosting the monthly premiums that recipients pay by $4. The bill also would pare back the prescription drug benefit and would permit the elderly to drop out of the program if they also dropped the popular doctor fee insurance program.

Bentsen acknowledged that he is struggling uphill in efforts save the catastrophic care legislation. “I know many feel we should repeal it,” he said. “There will be an effort on the Senate floor. On the House side, there’s a probability it’s going to be repealed.”

The committee’s ranking Republican, Sen. Bob Packwood (R-Ore.), predicted that the House “apparently will repeal it” by a large margin.

Bentsen adjourned the Finance Committee meeting until today because he was irritated that the Bush Administration has not offered help in rewriting the legislation. The Administration says it needs the surplus revenues forecast for the early years of the bill and has refused to recommend changes.

Bentsen was nettled because Louis W. Sullivan, secretary of health and human services, did not attend Tuesday’s committee meeting. Sullivan “should have been here,” Bentsen said. “There is no more important measure before his department.”

Speaking for Sullivan was Gerald Olson, assistant secretary for legislation, who said the Administration would accept virtually any committee plan that does not add to the deficit.

“You’re not going to give us any leadership,” Packwood said to Olson. Bentsen called for Sullivan to attend today’s meeting.