Beneficiaries howl, Congress considers pulling Catastrophic’s plug – Medicare outpatient drug plan

Beneficiaries howl, Congress considers pulling Catastrophic’s plug – Medicare outpatient drug plan – Inside Pharmacy

Ken Rankin

Beneficiaries howl, Congress considers pulling Catastrophic’s plug

WASHINGTON – While pharmacy leaders and HCFA officials continue to fine tune the new Medicare outpatient drug plan, Congress is considering legislation to abort the “catastrophic” program before it even takes effect.

Already a flurry of bills has been introduced to postpone implementation of the new benefit, and some Congressional critics of the program are pushing legislation to kill catastrophic coverage for the elderly altogether.

Behind the campaign to abolish the new program: a surprisingly strong backlash by Medicare beneficiaries themselves who object to the premium increases and stiff tax surcharges designed to finance the expanded coverage.

Rep. Bob Stump (R-Ariz.) – one of the architects of the repeal effort – calls last year’s Medicare Catastrophic Coverage Act “a costly expansion of Medicare” that offers only limited benefits to most recipients. Rep. Don Ritter (R-Pa.), the sponsor of separate legislation to repeal the new catastrophic coverage, describes the program as “a raw deal for seniors who have saved and invested wisely for their later years.

Opposition to the new catastrophic benefits has spread beyond Capitol Hill. The public policy analysts at the Heritage Foundation are urging President Bush to block the program, and health care administrators in a number of states have also joined the repeal forces.

On one side of the ledger, critics of catastrophic point to meager benefits for the nation’s senior citizens. Only 16 percent of the elderly will ever receive any prescription drug benefits under the program, 97 percent will never exceed the $1,370 annual out-of-pocket deductible for physicians’ bills, and less than 1 percent will benefit from the expanded hospital coverage.

On the other side, opponents say the costs to the elderly are excessive. Medicare premiums will jump 41 percent by 1993 (on top of a 38.5 percent hike in 1987), and in addition the law creates a stiff new income tax surcharge for all seniors with $150 or more in federal tax liability.

According to Rep. Peter DeFazio (D-Ore.) this new Medicare surtax “will equal 15 percent of taxable income in 1989 and will increase to as much as 28 percent in 1993.” The upshot, he says, will be a sharp new tax of as much as $1,000 per Medicare beneficiary.

On the other side of the issue is the Congressional Democratic leadership which fashioned the new catastrophic legislation just last year. House Ways and Means Chairman Dan Rostenkowski (D-Ill.), Senate Finance Committee Chairman Lloyd Bentsen (D-Tex.) and Senate Health Subcommittee Chairman Pete Stark (D-Calif.) all remain adamantly opposed to efforts to repeal or delay the new program.

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