GOP Planning Medicare Cost Hike for Rich

House Republicans will propose a means test for Medicare to curb the premium subsidy that now goes to even the wealthiest seniors, the chairman of the Ways and Means health subcommittee said Friday.

“It’s a subsidy question here of people who could afford to pay” for their own Medicare Part B coverage, Rep. Bill Thomas (R-Bakersfield) said.

Part B is the portion of Medicare that pays doctor bills and lab tests.

The $46.10 monthly premium that beneficiaries pay covers just 31% of the costs, with taxpayers subsidizing the rest from general revenues. A means test could cause a larger premium for people with higher incomes.

“I believe means testing will be in this,” Thomas told reporters after presiding at the close of a two-day forum where Republicans aired ideas on how to get the $270 billion in savings they seek from Medicare over seven years.

The program’s hospital trust fund starts dropping next year and could be depleted by 2002.

Thomas, a key member of a task force drafting the legislation for House Speaker Newt Gingrich (R-Ga.), said the Republican “Medi-Choice” plan will give seniors the options of choosing managed care plans, medical savings accounts or staying in the traditional fee-for-service program.

Almost 10% of Medicare’s 37 million beneficiaries are enrolled in health maintenance organizations. The Republicans are hoping to save tens of billions of dollars by encouraging more of the elderly to switch to these less-expensive managed care plans.

The lawmakers painted a rosy picture of how their constituents are responding to the GOP sales pitch for major Medicare reforms.

“All the yelling about Medicare is happening here on Capitol Hill and not in the district,” Rep. Mark Foley (R-Fla.) said.

“Managed care is not disliked as much as a lot of people think,” Rep. John Linder (R-Ga.) said.

Thomas said the GOP may also propose changing the way Medicare pays skilled nursing facilities and the way it pays for home health care--two of the fastest growing parts of the program. Hospitals already are paid predetermined rates that depend on the patient’s diagnosis, not the length of hospital stay.

Linder suggested that making seniors pay 20% of the charges for home health care visits would help crack down on waste.