Catastrophic health plan scrapped by Congress

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8 SOCIALIST ACTION NOVEMBER 1989 Congress faced a political catastrophe last month. Wealthy senior citizens (and some not so wealthy) were besieging their offices protesting the catastrophic health insurance law passed last session.

This law, passed by an overwhelming 328 to 72 vote in the House last year, had been hailed as the answer to the ruinous medical bills that confront so many older citizens. There was provision for payment for hospital stays, help with drug expenses, and part payment of doctors' bills. Medicare programs already cover part of these charges, but the new law piled on additional benefits.

Congresspeople fell over each other taking credit for this "great gift" to the elderly. Now they have stampeded to rescind the law. What went wrong?

First, the package of benefits proved to be not so generous as the lawmakers claimed. Medicare beneficiaries now pay 20 percent of their doctors' bills. The new law would limit the patient's share to $1370 a year. A welcome cap perhaps-but doctors' bills would have had to reach $6850 before this benefit took effect. It is estimated that only 7 percent of retirees would ever benefit from this provision.

To meet the high price of medicines, the plan proposed paying half of the cost of drugs after the senior has spent $600. But only 17 percent are expected to spend that much money on prescriptions in a single year. The other 83 percent of the elderly would collect nothing, even though they spend as much as $50 a month.

The aspect of aging that most disturbs the elderly is the cost of longterm nursing-home care. With charges of $1500 to $2000 a month, savings are soon exhausted, homes sacrificed, and bequests to heirs swallowed up. The catastrophic health law financed only a few days in a nursing home after a hospital stay. The problem of longterm care was ignored.

"The people should pay!"

These benefits failed to meet the needs of the elderly—yet they were costly. Reagan and Congress said the elderly should pay for their own healthcare. They are already paying nearly $32 a month under Medicare. The Budget Office calculated the additional premium needed to fund the extended benefits. The answer was $30 to be added to the present tax. This made a total of $62 a month.

Many politicians recognized that a premium of $62 month was too heavy a burden for those retirees living on Chair TRE Joseph Ryan/Socialist Action little over $400 a month. So they cut the additional charge to $4 a month, and put a 15 percent surcharge on those wealthier retirees who pay income tax. For 1989, the surcharge would be limited to $800, but the cap would go up thereafter. By 1993, the surtax would be 28 percent, with a ceiling of $1050.

It was this surtax that brought the wrath of wealthy senior citizens down on Congress. They made their objections known loudly and clearly. Any increase in taxes for the well- off was a betrayal of Reagan-Bush principles, they pointed out. Indexing for inflation meant that a retired couple, in a few years, could pay as much as $3300 a year in additional tax and Medicare premiums.

To add insult to injury, most of the well-to-do retirees already have the proffered benefits, either through private pension plans or private insurance. "You are laying an outrageous tax on us for something we don't need!" they yelled— loudly enough to be heard in every Congressional office.

Millions are unprotected

Congresspeople saw crowds of indignant retirees, led by those well-heeled elderly who can give or withhold considerable campaign contributions. At the same time, thousands of other seniors, who would pay only the extra $4 premium, also felt the new law was a ripoff.

The House rushed to placate this important voting bloc. With a 360 to 66 vote, Congressional representatives hastily reversed themselves-agreeing it was a lousy law that should never have been passed.

The Senate, realizing that repeal could mean a loss of $15 billion in revenue, tried to salvage something. Nearly all were agreed that the wealthy should not be taxed unduly. So they concentrated on saving the $4 extra premium. To do this, they slashed the benefits to the point where almost no one will collect anything. The House and Senate bills are now in conference, with total repeal of the law the most likely outcome.

Trying to meet the health needs of the American people by doing a little bit for this group or another group leaves millions of Americans unprotected. Even if the elderly were accommodated, young uninsured workers, children, and sufferers from AIDS would have to fight for their right to healthcare.

The logical answer is nationalized healthcare that covers every resident of the United States for free. Healthcare should be controlled by working people (and those too old or too ill to work) instead of by the ruling rich.