Daschle Unveils His Medicare Reform Proposal : Health: Senate’s top Democrat would cut spending growth one-third as much as GOP’s plans. Senior citizens would pay less in premiums in 1996.


Further raising the stakes in the partisan battle for public opinion over Medicare reform, the Senate’s top Democrat on Monday unveiled an alternative plan that would allow senior citizens to pay less in premiums in 1996 but would cut Medicare’s spending growth by about a third as much as the Republican proposals.

Sen. Tom Daschle (D-S.D.) said he intends to offer his plan as an alternative to the GOP bill when the controversy reaches the Senate floor later this year.

He called the Republican proposal, which was approved Saturday by the Senate Finance Committee, “radical and extreme,” and said that his proposal represents “a sensible” option.

It would reduce Medicare spending by $89 billion over 10 years--compared to the $270 billion in savings over seven years that the GOP is seeking. Both plans would achieve the savings largely through payment reductions to providers.


Daschle said the spending reductions in the Republican blueprint go “way beyond what is necessary” and would cause “a Medicare meltdown.”

At a Capitol Hill press conference, Daschle added that his plan would not require senior citizens to pay more in co-payments, premiums or deductibles.

The Senate minority leader’s plan was the third Democratic alternative to be announced in less than a week--a good barometer of the growing Democratic resolve to scale back both the Republican Medicare proposal and the GOP’s proposed $245-billion tax cut.

For months, Democrats have been doggedly fighting the Republican Medicare plans, characterizing the proposed reductions in the annual growth of spending as too severe (from about 10% to 6.4%) and as inappropriate at a time when the GOP also wants to enact such a large tax cut.


Republicans have strenuously argued that there is no connection between the two but the unrelenting Democratic attacks may be starting to stick.

On Sunday, Senate Majority Leader Bob Dole (R-Kan.) acknowledged that the Senate may have to scale back the size of the tax cut because some conservative Republican senators now harbor doubts about enacting the tax cut, which the House passed in March.

“Some Republicans at long last are getting it,” Daschle said Monday. “Some Republicans are finally hearing what we’ve been hearing now for the last several months: Don’t cut Medicare benefits to fund tax cuts for those who don’t need it; don’t slash Medicare $270 billion for a $245-billion tax cut. It’s wrong. It isn’t going to work. It’s politically indefensible. And it’s completely unnecessary.”

But Dole called his own press conference Monday afternoon to say he still hopes to persuade the Republican-controlled Senate to agree to the full tax cut.

“The Democrats have fabricated the Medicare-tax cut connection,” he snapped.

Sen. William V. Roth Jr. (R-Del.), chairman of the Finance Committee, also pledged to work for the full cut. “It’s my intent to provide a tax cut of $245 billion,” he said.

Daschle’s Medicare plan was endorsed by Sens. John B. Breaux (D-La.), Bob Graham (D-Fla.), Tom Harkin (D-Iowa), Edward M. Kennedy (D-Mass.), Joseph I. Lieberman (D-Conn.) and John D. (Jay) Rockefeller IV (D-W.Va.). The Democrats did not disclose details, saying that they plan to have the bill ready for public scrutiny by next week.

Generally, Daschle’s plan would give senior citizens greater choices of health plans, ranging from fee-for-service to health maintenance organizations, with the Health Care Financing Administration providing seniors with annual “report cards” on such provider organizations.


But Sen. Bill Frist (R-Tenn.), who is also a physician, belittled Daschle’s plan, saying that it “slapped on a Band-Aid when the patient, Medicare, has been diagnosed as dying of massive hemorrhage.”

Daschle’s proposal would lead to a one-year decrease in monthly premiums for Medicare’s Part B, which covers the cost of physician services. Currently, beneficiaries who opt to join the voluntary program are required to pay 31.5% of the cost of the fund, with the rest coming from general revenue. Currently, that translates into a monthly payment of $46.10.

The 31.5% formula is scheduled to decline to 25% next year because of a quirk in current law and Daschle would allow this to take place--meaning that beneficiaries would pay less in 1996.

The Senate GOP plan would retain the funding formula at 31.5%, which could produce savings of up to $60 billion over seven years--but cause monthly premiums to go up to $92 by 2002.

Under Daschle’s proposal, Part B monthly premiums would drop to just under $44, but then resume increasing, reaching about $82 by 2002.

The Senate Republican proposal also calls for an increase in the Part B deductible, under which beneficiaries now pay the first $100 of doctor bills each year. The plan would raise it to $150 in 1997, and add another $10 each year through 2002 until the deductible hits $200.

A plan similar to Daschle’s that was prepared by the Progressive Policy Institute, the research arm of the centrist Democratic Leadership Council, was introduced last week. That plan won the endorsement of Lieberman and Breaux as well as Sens. Bob Kerrey (D-Neb.) and Sam Nunn (D-Ga.).

On the House side, Rep. Jim McDermott (D-Wash.), a physician who played a prominent role in the health care reform debates of 1993-94, also has proposed a plan that would save $89 billion by cutting the rate of growth.


Also on Monday, most Democrats on the House Commerce Committee walked out of a hearing on the House GOP plan, calling the session a “charade.”

Rep. John Dingell of Michigan, the top Democrat on the panel, led the walkout after arguing in vain for hearings on the GOP plan and complaining that Democrats only received a copy of the 400-page bill late Friday.