GOP’s Health Plan Advances on Bumpy Road

When First Lady Hillary Rodham Clinton set out in 1993 to remake America’s $1-trillion health care system, she got some unvarnished advice from a Republican congressman: You can’t do it all in one fell swoop.

Just reforming Medicare alone “stretches you almost to the breaking point,” said Newt Gingrich, then a ranking member of the minority party. The White House ignored that privately delivered admonition, and the intended centerpiece of President Clinton’s first term collapsed under a tidal wave of criticism and ridicule.

Today the Republicans control Congress, but they too are ignoring the advice given two years ago by Gingrich, now Speaker of the House. They are struggling mightily to overhaul not only Medicare but also Medicaid, the government’s huge health care programs for senior citizens and the indigent. Their controversial plan is intended to produce $452 billion in savings by the year 2002.

Without holding any hearings and after just three days of sporadic debate, the Senate Finance Committee voted, 11 to 9, early Saturday morning to pass the complex Republican measure.

But the approval--strictly along party lines--came only after angry exchanges in private and in public that pushed the proposal to the brink of defeat. Such a GOP disaster was prevented only after compromises were brokered, bruised egos were assuaged and a Democratic walkout was averted--providing a glimpse of what lies ahead for an effort that clearly is pushing all parties near the “breaking point.”

The consensus emerging on Capitol Hill is that the outcome will be determined perhaps only after the current GOP proposals are passed by Congress, vetoed by Clinton and then renegotiated--meaning that the ultimate size of the Medicare and Medicaid reductions will almost certainly be smaller than now proposed.

That scenario seemed even more likely Saturday after the President, in his weekly radio address, said the GOP reductions “are way, way too much” and “far, far more than the medical system can handle.”

Clinton said the plan would end the national commitment to provide elderly Americans with quality health care regardless of income.

The Republican plan seeks a seven-year savings of $270 billion in Medicare spending, largely by cutting the rate of growth in payments to doctors and hospitals and by channeling senior citizens into less expensive managed-care settings. The plan also would save $182 billion over seven years in Medicaid spending, mostly by capping federal expenditures and converting them into block grants to the states.

Republicans say such measures are necessary to ensure the solvency of Medicare’s hospital trust fund and to reform an inefficient Medicaid program. But Democrats say the GOP is seeking to convert some of the savings into a $245-billion tax cut for the wealthy.

A third major component of the GOP bill would reduce spending for the earned income tax credit, a tax break for low-income workers, by $32.5 billion over seven years.

The tax credit sparked a particularly nasty turn of events Wednesday night: All nine committee Democrats had secretly agreed to stage a walkout from the panel if, as they had expected, committee Chairman William V. Roth Jr. (R-Del.) denied their request that Leslie B. Samuels, the assistant Treasury secretary for tax policy, be heard on the matter.

But Roth eventually learned of the agreement and allowed Samuels to take the microphone, averting the protest.

The Finance Committee approved the overall bill at 12:15 a.m. EDT Saturday, climaxing a day of high drama behind closed doors and a circus-like atmosphere on the Capitol grounds that belied the high stakes at hand.

Earlier in the day, actors in animal costumes roamed the sun-drenched lawn. Democrats wheeled out a 14-foot-high papier-mache Trojan horse, its belly filled with banners condemning the GOP proposals.

Not to be outdone, Tony Blankley, a senior Gingrich aide, paraded about with an eight-foot-tall ostrich--a living symbol, supposedly, of the Democratic head-in-the-sand refusal to save Medicare from bankruptcy.

But the real maneuvers were, as usual, played out inside the Capitol, far from public scrutiny.

Throughout the day and well into Friday night, Republicans on the Finance Committee held increasingly urgent meetings as they sought to avert what seemed like a growing possibility that one of their own, Sen. John H. Chafee of Rhode Island, might join the panel’s Democrats in a vote that would kill the entire bill--the linchpin of the GOP’s broader plan to balance the federal budget in seven years.

The specter of such a defeat loomed because the other 10 GOP committee members had consistently voted against Chafee, who joined the Democrats on amendment after amendment designed to soften the blow of the Medicaid reforms on low-income women, children and the disabled.

During a recess, an irritated Chafee pointedly told reporters that he had not made up his mind whether he would vote to report the bill out of committee.

By 6 p.m., Roth recessed the proceedings, giving way to intense private negotiations between Chafee and his GOP colleagues.

It took more than three hours to work out the details and nearly that much more time for the drama to play out before a packed auditorium of bleary-eyed onlookers.

“This is indeed an historic occasion,” Roth proclaimed afterward. “I believe this legislation will save Medicaid and Medicare, and it will help balance the budget.”

Among the concessions won by Chafee was a requirement that states provide health coverage to low-income pregnant women, children ages 12 and younger, and disabled individuals.

“This addresses a deep concern I’ve had about what this overall bill does,” Chafee said of the amendment, which was approved, 17 to 3. Added Sen. John D. (Jay) Rockefeller IV (D-W. Va.): “In the wasteland of this day, this is a very significant development.”

Chafee had also objected to a provision in the GOP bill that bans the use of federal funds for abortions except for pregnancies involving rape, incest or a risk to the mother’s life. But his amendment to strike the language lost, 11 to 9.

As introduced by Roth, the overall bill would begin phasing out the subsidy for Medicare Part B, which covers doctors’ bills, for seniors with incomes of more than $75,000 a year for individuals and $100,000 for couples. That would affect about 3% of senior citizens.

But the committee adopted a proposed amendment by Sen. Alfonse M. D’Amato (R-N.Y.) to phase out the subsidies starting at $50,000 a year for individuals and $75,000 for couples. That would affect about 10% of the elderly.

On other issues, the committee:

* Rebuffed a Democratic attempt to retain federal safety and quality standards for nursing homes but agreed to preserve federal Medicaid protections for a spouse threatened by poverty as a result of the nursing home bills run up by an ailing mate.

* Unanimously adopted an amendment offered by Sen. Don Nickles (R-Okla.) to require that funds derived from charging beneficiaries higher premiums and deductibles from Medicare’s Part B fund be deposited into the Medicare Part A hospital account, which is projected to go bankrupt by the year 2002.