Major Issues In Medicare Reform Proposals

Major issues still to be resolved in US Medicare reform are thestructure of payment changes to hospitals, physicians and managed care plans, and the extent to which beneficiaries will be expected to contribute to shore up Medicare finances, speakers at a roundtable discussion held by the Urban Institute have said. Marina Weiss, a former top aide to the Senate Finance Committee, said the latter is a thorny political problem for President Clinton, who vetoed a Medicare bill in 1995 after stating that it asked too much of seniors.

There are three separate Medicare plans; one from the Senate Finance Committee and one each from the House Ways and Means Committee and the Commerce Committee (see also page 15). Congress hopes to complete work on the plan before its summer recess in early August.

On physician issues, the plans are relatively similar. All would end the system of different payments for specialists and generalists, and delay the "practice expense" measure that some estimate could cut specialists' pay by up to 40%. The Ways and Means plan would set a $250,000 cap on "pain and suffering" damages in malpractice suits, central to the American Medical Association's wish list for the budget bill. On hospitals, both House plans would freeze payments for a year, then provide hospitals with minimal inflation rises in the following years. The Senate plan provides a rise for 1998, but of under 1%.