Senate, House Pass Companion Budget Bills

The Senate and House on Wednesday passed separate versions of landmark legislation intended to balance the federal budget in five years, restore welfare benefits to about 300,000 legal immigrants and impose significant savings to ensure the future solvency of Medicare.

Passage of the companion spending bills marks a major bipartisan triumph for President Clinton and the Republican leaders of Congress, who agreed on a balanced budget as this year’s top policy goal.

Support was strong in both chambers, with the Senate voting 73 to 27 for its version of the legislation and the House adopting its version by a 270-162 vote.

Both houses of Congress now turn their attention to legislation calling for about $85 billion in tax cuts over five years. The House is expected to vote on its tax bill today; a final Senate vote is expected Friday or Saturday.

Wednesday’s votes in the Senate and House will increase “credibility and confidence” that Congress is serious about balancing the budget by 2002, said House Budget Committee Chairman John R. Kasich (R-Ohio).

“We take care of our nation’s children, the disabled, and seniors of today and tomorrow,” said Kasich’s Senate counterpart, Finance Committee Chairman William V. Roth Jr. (R-Del.).

Both the Senate and House spending bills represent a reprieve for many low-income legal immigrants who faced a potential cutoff of federal income support and medical benefits under last year’s welfare reform law.

An estimated 500,000 immigrants had been expected to lose Supplemental Security Income and Medicaid benefits this fall under the welfare law. The Senate and House bills would ensure that about 300,000 of them would retain those benefits, according to congressional officials.

“People understand that this is the most vulnerable population of all,” said Sen. Dianne Feinstein (D-Calif.).

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Under an amendment approved by the Senate on a voice vote, all legal immigrants who already receive benefits would be allowed to keep them, and those who become injured in the future would still be eligible for disability coverage.

The House bill provides less protection for poor immigrants who become disabled in the future, and advocates are attempting to rally support for the Senate’s more generous approach.

The additional protection endorsed by the Senate is necessary to provide “fairness to people who come to this country legally, who pay their taxes in good faith and play by the rules,” said Sen. Frank R. Lautenberg (D-N.J.). “Whatever the cause, they’re here at our invitation, unable to work and unable to support themselves.”

The conflicting approaches taken by the two houses will be a key area of conflict when representatives of the Senate and House meet in conference later this month to forge a single piece of legislation.

The most intense disputes will focus on the Senate’s decision to launch major Medicare reforms to bolster the future financial health of the huge benefit program, which accounts for roughly $200 billion of the $1.5-trillion federal budget.

Both the House and Senate bills would trim $115 billion from future Medicare spending by slowing the rise in payments to doctors, hospitals and health maintenance organizations.

Among other provisions, the HMO cuts would shift significant amounts of money from high-cost areas, such as California, Florida and New York, to rural areas. Payment rates for Medicare HMOs would be trimmed in areas such as Los Angeles and Orange County and boosted significantly in rural counties.

But the Senate took two additional--and dramatic--steps that go far beyond the House legislation. In so doing, the Senate opened what promises to be a national debate about how to finance health care and retirement benefits for the huge baby-boom generation, those Americans born between 1946 and 1964.

First, the Senate legislation would require baby boomers to wait another two years to receive Medicare benefits. The age of eligibility, now 65, would be gradually increased, starting in the year 2003, until it reaches 67 in the year 2027.

Second, in an even more politically explosive move, the Senate voted to require affluent seniors--individuals with incomes over $50,000 and couples making $75,000 or more--to pay substantially more for Medicare coverage of doctor bills.

All 38 million Medicare beneficiaries currently pay $525 a year for “Part B” coverage of doctor bills and other outpatient expenses. If the Senate provisions become law, the payment could jump as high as $2,100 a year for the wealthiest seniors--individuals with incomes over $100,000 a year and couples making $125,000 or more.

Senior citizens groups vowed an aggressive fight to get Congress to drop the income-related provision from the final bill.

“We’re going to work for the House bill, which we think is a more fair bill,” said John Rother, director of legislative policy for the American Assn. of Retired Persons. “I think we’ll be quite active at the grass roots.”

Senate Minority Leader Tom Daschle (D-S.D.) told reporters he thinks there is a 50-50 chance the two provisions will survive, although he acknowledged that Clinton “is not very comfortable with either one.”

Senate Majority Leader Trent Lott (R-Miss.) expressed optimism that the Senate provisions would become law. “I hope there’s a good chance. The votes were overwhelming. The votes were bipartisan,” he said.

Among the most significant provisions in the two spending bills is a proposal earmarking $16 billion over five years for states to provide health care to some of the 10 million American children who lack medical insurance.

But some Democrats, led by Rep. Rosa L. DeLauro of Connecticut, charged that as few as 520,000 children will be covered despite the massive outlay. DeLauro said the funds would be given to doctors and hospitals for treating children, without any guarantee that the doctors and hospitals will increase the number of children they are caring for.

The Senate and House spending measures also increase the range of health programs available under Medicare, including HMOs run by doctors and hospitals. Preventive coverage would be expanded from mammograms to include Pap smears and cervical cancer screening for women, prostate cancer tests for men and payment for glucose test strips for diabetics.

At the same time, the Senate bill would impose a $5-per-visit charge for home health visits--a levy that some Democrats sharply criticized.

Another potential stumbling block in both bills is a provision inserted by Republicans that abortion rights advocates say would permanently restrict abortions by banning the use of federal funds for such procedures.

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Another difference between the House and Senate measures has to do with the number of Medicare beneficiaries who would be allowed to open “medical savings accounts” as a new form of health insurance. The MSA concept combines a high-deductible insurance policy with a tax-free savings account.

The House legislation would allow 500,000 participants in a trial run for MSAs, but the Senate would allow only 100,000 participants. The Clinton administration generally does not like MSAs, believing they would divert healthy individuals from traditional insurance pools, thus driving up the cost for those remaining.

Both the House and Senate voted to provide $1.5 billion to help low-income Medicare recipients pay their premiums.

California’s Democratic senators split on the vote Wednesday, with Feinstein backing the budget measure and Sen. Barbara Boxer voting against it.

Staff writers Melissa Healy, Janet Hook and Erin Trodden contributed to this story.

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Impact on Benefits

Highlights of the similar budget-balancing packages of savings approved by the House and Senate on Wednesday.

--Medicare choice: Senior citizens could enroll in new types of health plans beyond the traditional program, which pays bills one at a time, and health maintenance organizations, which operate in many parts of the country. New options would include managed care plans run by doctors and hospitals and preferred provider organizations, which provide some of the advantages of HMOs but fewer restrictions. A limited number of seniors could open medical savings accounts, using their Medicare benefit to buy cheaper, high-deductible insurance and putting the extra cash in tax-exempt savings accounts.

--Medicare payments: Premiums would rise by about $20 a month over five years under both House and Senate plans. Under the Senate plan, seniors making more than $50,000 would pay even more, with total annual premiums increasing about $32 for every additional $1,000 in income until hitting a maximum premium of $2,160 next year for those with incomes of $100,000 or more. The Senate plan would also establish $5 co-payments for home health care visits, which now are free.

--Medicare eligibility: Under the Senate plan, the age of eligibility for Medicare benefits would gradually rise from 65 to 67 by 2027. It would remain at 65 in the House bill.

--Children’s health: States would receive money to provide health care for some of the nation’s 10 million uninsured children. The Senate bill provides $24 billion and requires states to use the money for health insurance. The House bill provides $16 billion and gives states greater flexibility to use the money for anything from insurance to direct payments to hospitals.

--Immigrants: Legal immigrants who are not citizens would have some welfare benefits restored. Immigrants already in the Supplemental Security Income program could remain there. Under the Senate bill, immigrants who arrived before the welfare reform bill was signed last August could apply for SSI if they become disabled.

--Medicaid: Hospitals that serve large numbers of poor and uninsured people would see payments shaved by $15 billion.

Sources: Times staff and wire reports