GOP Changes Could Double Medicare Fees, Memo Says

Monthly Medicare premiums could more than double for all beneficiaries and quadruple for those with high incomes under a revised version of a Republican plan to overhaul Medicare recently drafted by the staff of the House Ways and Means Committee.

The new document lists options for restructuring Medicare and carrying out a GOP plan to cut Medicare growth by $270 billion over the next seven years, an unprecedented reduction that is the most politically explosive and technically difficult issue facing Congress.

The committee memorandum, which was obtained Friday by the Washington Post, suggests far greater cost increases to beneficiaries than previous GOP proposals that have reached the public eye this summer. However, the documents offer only a snapshot view of what congressional sources depict as a continuously evolving range of options.

“No decisions have been made,” said Charles Kahn Jr. the top GOP health staff aide on Ways and Means. Ari Fleischer, committee GOP spokesman, insisted that the doubling of premiums described in the memorandum “won’t happen.”

Increasing those premiums, which help pay for the doctor care portion of Medicare (Part B), is one of the easiest means the government has to reduce its Medicare costs. Monthly premiums are now $46.10 per person and are set to cover about 31% of the costs. Under current law this will drop to 25% next year and a smaller percentage later. The government pays the rest of the Part B premium cost from general revenues.

The GOP memorandum offers four options for the premiums--keeping them at 31%, raising them to 33%, 35% or 50%.

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According to calculations by one expert, this jump would more than double premiums by the year 2002 compared to what they would be under current law.

In another new option, premiums for single people with incomes more than $75,000 and couples with income more than $150,000 would be increased enough to cover the full cost of their Part B entitlement, quadrupling their current rate to roughly $320 a month per person.

In addition, the $100-a-year deductible that beneficiaries must pay on doctor bills before Medicare starts paying their doctor bills would be increased. Three options are given: $150, $200 and $250. The deductible then would be raised annually to keep pace with inflation.