Surtax Angers Orange County Seniors

Like many older Americans throughout the country, Orange County seniors are up in arms over a planned surtax on their Medicare bills that would help finance the government’s controversial catastrophic health insurance program.

“We have already received over 3,000 pieces of mail on this topic,” said Rep. C. Christopher Cox (R-Newport Beach). None of the writers favors the program as it was enacted last year, Cox said.

“In the four years I have been here, we have never received more mail on any other issue,” said Joe Eule, legislative assistant for Rep. Robert K. Dornan (R-Garden Grove). Dornan voted against the catastrophic health bill last year because of its controversial financing package, Eule said.

Seniors in Orange County are echoing complaints of their counterparts elsewhere. They assert that the benefits offered by the program largely duplicate coverage offered through other insurance policies, that the program is too expensive, and that the plan to finance it places too great a burden on the middle- and upper-income elderly.

The principle benefits provided under the program are unlimited days of hospital care after the insured patient has spent $560, a ceiling on out-of-pocket expenses for doctors’ services and payments for prescription drugs. The program, however, does not cover the cost of nursing-home care.

To finance the program, all 33 million Medicare recipients would be required to pay an extra $4 a month. The 40% of the elderly who are affluent enough to pay income taxes will be required to pay an additional fee--a 15% surtax on their Medicare premiums that could reach $800 per person beginning next year.

Program Spurned

Orange County’s congressional delegation largely spurned the program during a key House vote in June, 1988. Joining Dornan in voting against it were Rep. William E. Dannemeyer (R-Fullerton) and former Rep. Dan Lungren (R-Long Beach). Former Rep. Robert Badham (R-Newport Beach) did not vote. Reps. Dana Rohrabacher (R-Lomita) and Cox were not yet in office.

Only Rep. Ron Packard (R-Carlsbad) supported the plan, after initially opposing it. Late last week, Packard switched sides and said he has joined those calling for repeal of the program.

“Clearly, the only route to take is to . . . go back to the drawing board,” Packard said.

“The burden to the elderly is criminal,” said Minna Liebman, who lives at Leisure World in Laguna Hills. Liebman, former president of the Grey Panthers (a seniors activist group), said most of the elderly are opposed to the surtax. The benefits afforded by the program are good, she said, but they should not have to be supported by “such a small segment of the population.”

“By and large, old people have a difficult time” financially, Liebman said. In Orange County the elderly are fairly affluent, she said, but that is not true around the country. Older people recognize the “bias in the bill” against the elderly, Liebman said, noting that not all older people need such a program. “I’m in good shape,” she said. “I do aerobics and may never need the benefits until I’m 100 or so.” The cost of the program should be funded by the general public, she said.

“I feel that people are looking for (help in paying for) long-term care,” a benefit not offered by the government’s program, said Julie Schoen. Schoen is the Orange County coordinator for the Health Insurance Counsel and Advisory Program.

Seniors say they are “not asking for young people to pay for their health care, and they don’t want to be a burden to anyone,” Schoen said, adding that they just want to get what they pay for.

Schoen said the bill is worth saving, but some trade-offs, such as reducing the amount of drug coverage, could be made to reduce the cost. She said the group has encouraged seniors who feel strongly about the measure to write their congressmen. She said more than 15,000 letters from their group have already gone to local congressmen in opposition to the bill.

“No other group has such a discriminatory tax,” said Robert Shaffer, chairman of the Catastrophic Care Task Force.

“Funding should go back to the fundamentals,” Shaffer said, adding that it should be spread evenly among all people earning wages. “We demand equal treatment.”

“A classic free-rider situation” is how John Roth, director of the American Assn. of Retired Persons, described the new surtax.

The benefits are definitely important, Roth said, but Congress needs to find a broader financial base for the program. The association “advocates an excise tax on cigarettes” as an alternative for financing, Roth said. There are definite health links between cigarettes and Medicare costs, Roth said, adding that “well over a majority” of Americans polled support the tax on cigarettes.

“It’s one thing to say you’re unhappy,” Roth said, but then “the question becomes, what do you want instead?” What the association of retired persons wants, along with the cigarette tax, is a higher estate tax and a higher payroll tax on those whose income is over $48,000, Roth said.