Senior Citizens Up in Arms Over Cap on Medicare in Health Plan : Medicine: Groups say they’ll fight entire reform package if spending limits are implemented. First Lady visits Capitol Hill to ease rising concerns.

The politically powerful senior citizens lobby, angered by the likelihood that major restrictions on Medicare spending would be used to help fund health care reform, is on the verge of a full-scale revolt against President Clinton’s developing plan.

If the White House insists on a stringent cap on Medicare spending, “the aging organizations may just say ‘the hell with it’ ” and fight the entire plan, warned Lawrence Smedley, executive director of the National Council of Senior Citizens, which includes 5 million affiliated members in groups of union retirees and church clubs.

“The Administration is on dangerous ground--there is growing anger in our ranks,” said Daniel Thursz, chairman of the influential Leadership Council of Aging Organizations, which represents 35 diverse groups.

Meanwhile, First Lady Hillary Rodham Clinton visited Capitol Hill Thursday, trying to calm rising concerns about the proposal to restrict the growth of Medicare and Medicaid payments to doctors and hospitals, saving $238 billion by the year 2000.

The proposal would generate more than half of the $441 billion needed to carry out the reform plan.

The White House said Thursday that its critics do not understand the plan and claimed that the value of new prescription drug and long-term care benefits for senior citizens would far outpace the reduction in payments to doctors and hospitals. “Overall, the plan is a good deal for seniors and a good deal for providers,” said health care spokesman Kevin Anderson.

He said that the larger pool of money for doctors and hospitals created in the early years of health reform as millions of Americans now lacking insurance become covered for the first time will make acceptable slower growth in payments that doctors and hospitals get from Medicare.

But senior advocacy groups and their powerful allies in Congress are dubious. Americans over 65 have the highest voter participation rate of any age group and Congress has been especially sensitive to their concerns about Medicare and Social Security.

President Clinton must have enthusiastic support from this group to win approval of his health care plan. In 1992, they were his most loyal voters. According to exit polls, he received at least 50% of the votes cast by this age group. His share of the total national vote was 43%.

“The bottom line is what the whole program will cost seniors,” said Martha McSteen, president of the 5-million member National Committee to Preserve Social Security and Medicare.

“We’re having difficulty measuring the value of these new benefits when compared to huge new cuts in Medicare and higher premiums, co-payments and deductibles,” she said.

“Seniors are very concerned that they are going to be asked to foot more than their fair share of the bill, given the recent budget agreement which led to higher taxes on Social Security benefits and $56 billion in cuts in Medicare funding,” said McSteen, a former commissioner of Social Security.

Sources who have seen the Administration’s current draft of the health plan, a 300-page book with no copies allowed outside the restricted room in the Old Executive Office Building, said that it calls for $441 billion to fund health care reform between 1994 and 2000, with $124 billion coming from Medicare and $114 billion from Medicaid, a federal-state welfare program for the poor.

Total spending for Medicare and Medicaid would rise, as it does every year, but the rate of increase would be slowed. For example, the Administration wants to give hospitals a smaller increase in their annual adjustment for inflation and tighten the fee schedule for doctors.

Medicare already pays less for services than private insurance companies and senior advocates fear that new restrictions would discourage doctors and hospitals from serving Medicare beneficiaries.

The largest senior organization, the 33-million member Anerican Assn. of Retired Persons, said that the White House plan would work only if the private sector is subject to the same new stringent cost controls as Medicare.

“If we’re talking about Medicare cuts alone as a way of financing health reform, we would fight that with all our strength--we’ve gone as far as we can go down that road,” said John Rother, the AARP director of federal legislation and policy.

“The key question is whether there is effective cost containment on the private side to match the savings on the Medicare side,” said Rother. “If just Medicare is controlled, our answer is ‘no way.’ ”

Rep. Henry A. Waxman (D-Los Angeles), the chairman of a crucial health care subcommittee who has generally been supportive of the Administration’s health reform efforts, said he is skeptical that the reductions in the growth of Medicare and Medicaid are “realistic or politically acceptable.”