GOP Abandons Higher Medicare Premiums For The Well-Off

Facing the fact that Democrats could make it an issue in 1998'selections, US Republican budget negotiators have abandoned a Senate plan to raise Medicare premiums to wealthier beneficiaries. They have also put aside plans to raise the Medicare eligibility age to 67 from 65, and to charge a $5 co-payment for certain home health care services.

President Clinton was blamed for ending the plan to use the balanced budget deal for long-term changes to control Medicare costs when Republicans accused him of refusing to show leadership and including "a poison pill." He endorsed the concept of means testing but wanted the Internal Revenue Service, not the Department of Health and Human Services, to compute and collect the higher premiums. The GOP felt his plan would have seniors mistake the higher payments for a tax hike.

While House Speaker Newt Gingrich said the GOP Senators would get one more chance to convince the President to agree to the plan, the White House said it made more sense to deal with this as part of a separate long-term effort to restructure entitlements after the budget agreement is completed. Stressing that the President favored means testing, an official said the White House had devised an alternative plan, using the IRS as a collection agency but with those paying the higher premium not using their regular tax form to do so.