NEWS ANALYSIS : GOP Positions Itself as Savior of Medicare : Policy: Republicans have successfully cast their reform plan as a strategy to rescue the once-untouchable health system and help balance the budget.

Congress is about to slash the growth of Medicare spending. The only question is how much.

Over the years, members of Congress considered it an article of faith: Tampering with benefits for the elderly--mainly Social Security and Medicare--could be lethal to their own political health.

But the aggressive Republican majority in Congress has rewritten the political equation by tying Medicare restraint to the broader goals of saving the program from bankruptcy and balancing the federal budget.

It hopes to persuade the elderly that a slimmed-down Medicare program can provide them with first-class health care even while contributing to a deficit-free future for their children and grandchildren. The House Republican leadership’s Medicare proposal, which will start moving through the legislative mill this week, would slice $270 billion out of Medicare’s projected growth through the next seven years.

President Clinton has been maneuvered into a me-too stance: After proclaiming that Medicare needed no repairs, he reversed field this summer and said $124 billion in savings over the next seven years would prevent the program from going bankrupt at the end of that period.

Clinton’s stance reflects the gravitational pull of the Republicans’ approach. Democrats complain that the GOP Medicare plan is designed to pay for a proposed tax cut, whose seven-year price tag of $245 billion seems suspiciously close to the Medicare savings goal.

Reconciling Clinton’s target with that of the congressional Republicans will be messy. But most analysts predict that some sort of austerity package will emerge that both sides can agree on.

“The polls show there probably has to be some action on Medicare,” said Ed Howard, director of the Alliance for Health Reform, a bipartisan research organization.

By hammering away at the theme of protecting Medicare, he noted, the GOP “changed the question from, ‘Do you want them to take $270 billion from Medicare to give tax breaks to the rich?’ to something very different: ‘Do you want to cut the growth in Medicare to save the program from bankruptcy?’ ”

Even the giant senior lobby, the 31-million-member American Assn. of Retired Persons, has retreated into a defensive stance under the GOP onslaught. “I don’t think there’s any doubt by anybody that the current Medicare system needs to be changed,” said AARP spokesman Peter Ashkenaz.

The AARP says it could live with $110 billion in cuts, and Ashkenaz acknowledged: “We understand there have to be some hits to beneficiaries.”

If affluent seniors have to pay more for Medicare premiums, a key part of the GOP plan, Congress should also cut back the tax-free health insurance enjoyed by upper-income workers, according to the AARP. The GOP congressional majority intends to brush aside that advice and proceed with its own blueprint.

Suddenly, the Republicans seem sure to succeed in making individuals earning at least $75,000 a year and couples earning more than $150,000 pay more for Part B of Medicare, which helps pay doctor bills. All beneficiaries now pay $46.10 a month, which represents 31% of the program’s cost. The rest comes from general tax revenue. If the rich seniors lost all of the subsidy, their payments would triple to about $150 a month.

Times have changed since 1988, when Congress passed “catastrophic care” legislation that would have expanded Medicare benefits to prescription drugs and for the first time limited beneficiaries’ out-of-pocket spending for hospital and doctor bills.

That program would have been financed by a tax on the affluent elderly. They rebelled, forcing an embarrassed Congress to repeal the law before it ever took effect.

This time around, Howard predicted, the protests by the affluent over their added Medicare burden will be mild because they do not want to be accused of thwarting a balanced federal budget.

Daring as they are, House Republicans still recognize the potency of the senior lobby. They want to extract from beneficiaries no more than one-quarter of their prospective Medicare savings.

For all Medicare enrollees, their plan, unveiled Thursday, would raise the monthly Part B premium from $46.10 a month to at least $90 a month in the year 2002. Under Clinton’s plan, the premium would grow to $83.

Republicans also pledged to leave untouched the deductible (under which patients pay the first $100 a year in doctor bills) and the co-payment (under which they pay 20% of authorized charges).

The vast bulk of the total Medicare savings would come from restrictions on government reimbursement to doctors and hospitals and from the hoped-for decision of millions of people to move into health maintenance organizations and other forms of managed care.

And the Republicans hasten to insist that any beneficiary who wanted to stay in the current system, free to select any doctor or hospital, would be left alone.

“For current seniors, change of any kind is infinitely scarier than the status quo,” House Majority Leader Dick Armey (R-Tex.) told a Medicare conference earlier this year. “Ultimately, the Republicans have to convince a younger generation that this system cannot be sustained.”

The younger retirees, and the workers who come after them, are the ones on whom the GOP is counting to move easily into managed care, attracted by HMOs offering coverage for prescription drugs, dental care and other services that are outside Medicare now.

Republicans have won the upper hand by pursuing a carefully coordinated and unified strategy. House GOP leaders instructed the rank-and-file to stick with basic themes: Medicare is going bankrupt and Republicans are committed to saving it.

By emphasizing the threatened bankruptcy of Medicare’s hospital trust fund, a poll showed last month, the Republicans have convinced 64% of the public that something must be done, a sharp increase from 33% in April, before the blitz began.

Republican members of Congress were also advised to avoid the word “improvement.”

“When seniors hear the words ‘improve’ and ‘Medicare’ in the same sentence, they immediately think of lower deductibles, free prescription drugs, subsidized hearing aids and eyeglasses, cheaper in-home care and reductions in everything else they now have to pay for,” the memo said. “The quickest path to defeat is to over-promise seniors.”

Having won the battle of the polls, the GOP now has the White House on the defensive. The Administration will not release the details of its Medicare plan.

“If we release specific proposals, the Republicans will say it is just a foundation and will tell us: ‘We want to do a few things more,’ ” said a White House official.

Clinton and congressional Democrats will keep insisting that the GOP wants $270 billion from Medicare to help pay for $245 billion in tax cuts. But Republicans are confident they can convince seniors that their prescription is right.