Medicare: Plenty Of Room To Deal

President Clinton and the GOP leadership are inching toward a compromise on a seven-year budget plan. To make their self-imposed Dec. 15 deadline, they'll have to speed things up, but at least the critical logjam over Medicare seems to be breaking. The difference between the proposed dollar amounts, $270 billion in Medicare cuts from the GOP and just $124 billion in cuts from the Administration, is still large. In reality, though, the philosophies behind the Medicare overhaul are similar, and that should lead eventually to a budget deal.

But there's more good news: The GOP and Democrats are also getting pretty close to achieving the key goals of Medicare reform--wider choice for the elderly, including more use of managed care and more competition among providers, leading to slower medical inflation. This level of consensus is something of a pleasant surprise, after all the vitriolic rhetoric the two parties have been trading this year. The big sticking point that remains: the standard Medicare insurance premiums charged to the elderly. The GOP wants to let the current $46.10-a-month premium rise with inflation to $88.90 by 2002. The Clinton Administration first balked at any increase over current law, but now it is proposing to allow the premiums to increase in the later years, to $77 by 2002. The difference is just $12, but the total dollar amount over seven years could be considerable: as much as $32 billion. But even with the Republican proposal, seniors will be paying for just 31% of the cost of their outpatient insurance benefits, with taxpayers picking up the rest.

Clinton is still expected to veto Congress' medical plan. But afterward, the President should accept the GOP Medicare measure as the basis for serious negotiating. Admittedly, the GOP bill isn't perfect. For example, it still contains a gimmicky "fail-safe" provision that promises unspecified cuts of payments to doctors and hospitals should other policy changes fail to provide expected dollar savings. That clumsy provision ought to be dropped. Once the President puts down his veto pen and the political posturing ends, the country can finally get a sensible compromise on Medicare.

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