Catastrophic Care Rescued in Senate : Measure Stops Short of Repeal; Would Keep Hospital Benefits, Kill Surtax

The Senate late Friday unanimously approved a stripped-down version of Medicare’s catastrophic care provisions that would keep expanded hospital benefits and abolish the vastly unpopular surtax on senior citizens.

The action stopped short of a total repeal of the controversial program, a step voted by the House Wednesday. A House-Senate conference committee will have to reconcile the two chambers’ very different approaches to coping with the grass-roots revolt against the program by the elderly taxpayers who are paying the surtax.

The Senate voted 73 to 26 against total repeal and then, by a unanimous vote of 99 to 0, agreed to keep the program’s central benefit: a guarantee that Medicare will pick up all hospital costs after beneficiaries pay $560 for the first day of care.

Medicare’s expanded hospital benefit would be financed by an additional $4 a month on top of the $27.90 that all 33 million Medicare beneficiaries pay to cover some of the costs of their coverage.

Kept Remnant Alive

The Senate, unlike the House, decided to keep alive at least a remnant of the biggest new social program adopted during Ronald Reagan’s presidency. Senate Minority Leader Bob Dole (R-Kan.) said the Senate vote should “show the House there are limits on how far to go on this issue.”

The Medicare expansion broke with precedent by placing the entire financing burden on the beneficiaries themselves, instead of spreading it over all taxpayers.

“We don’t say farmers (should) pay more because of farm subsidies,” said Sen. Paul Simon (D-Ill.) “We don’t say parents should pay more because of education subsidies.”

“Our problem is we did too much at once and we wanted to charge them (the elderly) for it,” said Sen. Dave Durenberger (R-Minn.).

During a day-long debate, senators swept aside efforts by leaders of both parties to preserve more of the present program’s benefits. As enacted just more than a year ago by overwhelming congressional majorities, the program also put a limit of $1,370, effective next year, on how much Medicare beneficiaries would have to pay out of their own pockets for doctor bills, and it provided coverage as of 1991 for some prescription drug costs.

By a decisive vote of 62 to 37, the Senate rejected an amendment by Durenberger to retain both the hospital benefit and part of the doctor bill coverage.

But the Durenberger amendment’s fatal flaw was that it would not have eliminated the surtax but merely reduced it. The surtax, now 15% of income tax liabilities up to a maximum of $800, would have been cut to 10% and been capped at $200.

Majority Leader George J. Mitchell (D-Me.), pleading for support for the Durenberger measure, said the benefits it offered were crucial to many of the elderly. “There are many whose voices have not been heard,” he said. “They lack adequate private insurance and they have no money to buy it.”

Joining his appeal was Dole, who said: “Let’s not forget . . . our poor elderly will be helped by this program. We promised too much, we taxed too much, let’s not throw it all out.”

But the vast majority of their colleagues in both parties decided they had to pare the catastrophic package even further in order to eliminate the surtax.

“The object of the anger of senior citizens today is the surtax, and they will not be happy until the surtax is eliminated,” said Sen. John McCain (R-Ariz.), whose proposal for retaining the hospital benefit, financed by a flat premium, eventually won Senate approval.

The House, by contrast, voted 360 to 66 to wipe out the program entirely. Because of the huge margin, it was uncertain whether House conferees will be willing to accept a remnant of the catastrophic care program.

A majority of senators were unwilling to discard the entire program.

“Do we have the courage to stand up and take the heat and vote for something we know in our hearts is good health policy?” asked Sen. John D. (Jay) Rockefeller IV (D-W.Va). “We’ve pared it back and back and back, and now we’re faced with the decision to give them nothing or at least something they can hold onto. Are we going to strip them of hope or give them something?”

McCain, the author of the proposal adopted by the Senate, had been working hard for repeal of the surtax since the opening of Congress in January. His ideas were scornfully rejected by supporters of catastrophic care in its original form, including some advocacy groups for the elderly. But after the House voted total repeal, McCain’s plan proved the only way to preserve even a scrap of the catastrophic package.

The McCain plan would keep hospital coverage but virtually wipe out the other major high-cost elements of the catastrophic care program.

Every senior citizen, “including my mama,” would like to give Sen. Mc Cain “a big kiss,” said Sen. Phil Gramm (R-Tex.). “ . . . This will be the first time in American history both bodies have voted to roll back a massive new entitlement.”

There would be no cap on personal spending for doctor bills. The easing of standards for admission to skilled nursing facilities would be reversed.

Medicare would return to the old rules, which require three days in the hospital before a patient can enter a skilled nursing facility. And only a handful of drugs--those taken intravenously and compounds used after a transplant--would be covered by Medicare.

Some of the less costly benefits would be retained. Medicare would help pay for mammography screening for breast cancer, and home health benefits would be expanded. And Medicare would finance up to 80 hours a year of respite care, allowing the families of seriously ill beneficiaries to hire someone to give them a rest from caring for bedridden family members.

McCain’s program also would continue the new financial relief for spouses of persons in nursing homes, and the expansion of medical coverage for the impoverished elderly and for poor pregnant women and infants.

Before accepting McCain’s plan, the Senate rejected one amendment to keep only the prescription drug portion of catastrophic care and another to keep all benefits by replacing the surtax with higher income tax rates for some of the nation’s 600,000 wealthiest taxpayers, who are now in a 28% tax bracket.