House Acts on Protests by Elderly, Votes Repeal of Catastrophic Health Insurance

The House, responding to a firestorm of protest from elderly Americans against having to pay for expanded Medicare benefits, voted 360 to 66 today to repeal the catastrophic health insurance program.

It then turned to consideration of a proposal to salvage a small piece of the year-old Medicare expansion.

However, Rep. Pete Stark (D-Oakland), chairman of the House Ways and Means Committee’s health subcommittee, said the outright repeal is likely to stand.

Stark was one of the main authors of the catastrophic program, signed into law last summer with great fanfare by then-President Ronald Reagan and hailed as the most significant expansion of Medicare in its two decades of existence.

Today’s vote to repeal it was a startling reversal of last year’s 328-72 vote to pass the original measure.

Despite the repeal vote, however, the final judgment on catastrophic health insurance is far from over.

The action shifts to the Senate, where repeal sentiment is also strong but where Finance Committee Chairman Lloyd Bentsen (D-Tex.) is looking for ways to save the framework of the program.

Complicating the final decision was the fact that both the House and Senate wove the catastrophic health issue in with a massive deficit-reduction bill containing a number of other controversial topics--including a capital gains tax reduction, child care and taxes on ozone-depleting chemicals.

In the end, the massive compromise measure will return as one big package to both chambers for a single up or down vote.

The feature in last year’s legislation that prompted the cries for repeal stemmed from a bipartisan agreement that the cost of the expanded benefits must be borne fully by the 33 million elderly and disabled people covered by Medicare.

Congress structured the increased fees so those in higher income brackets would pay a larger share in proportion to their tax liability--up to a maximum of $800 this year.

But that financing feature generated a firestorm of protest and overshadowed the big expansion in benefits for hospitalization, doctor bills and other costs.

The cry for repeal came mainly from three quarters:

--Retirees who complained that their former employers were already giving them additional benefits they were being forced to purchase from Medicare.

--Upper-income retirees who objected to having to pay a disproportionate share of the costs to make up for the modest $4-a-month assessment on the estimated 56% of Medicare beneficiaries who do not have enough money to owe any income taxes.

--Those who complained that the program did not address the main need of elderly Americans: insurance for nursing homes and other long-term care.

With repeal or a massive rollback a virtual certainty, congressional health policy leaders said they anticipate even greater difficulty in the future in winning support for expanded health programs for the elderly.