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Saving (on) Seniors' Health Care

Will Medicare end up losing its entitlement status?

MEDICARE, packing a lot of emotion, is not a subject easily addressed. In Atlanta the other day, House Speaker Newt Gingrich had to leave a conference by a back elevator to avoid a confrontation with trade unionists shouting that Republicans should ''take their greedy hands off Medicare.'' Mr. Gingrich, in turn, accused the Clinton administration of ''irrational demagoguery'' about Republican plans to cut $270 billion in Medicare spending over seven years. And the Republicans demanded that television stations not carry Democratic attack ads they called inaccurate.

Having covered the launching of Medicare in 1966, let me now try to get behind the sound-bite contest and grasp what the Republicans are trying to do. It is manifestly true that with the population growing older and health care growing more expensive, something will have to be done to avoid insolvency. Now that cost-containing health reform has failed in Congress, there are, theoretically, two ways to achieve savings - at the expense of providers, which is economically hard to do, and at the expense of beneficiaries, which is politically hard to do. At least, if the beneficiaries understand what is happening.

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There is no single detailed Republican plan, but one that reflects Republican thinking has been drafted by the staff of the House Ways and Means Committee. It appears to rest heavily on raising - perhaps doubling - premiums for Medicare Part B (the doctor insurance part). It also includes a plan for vouchers to buy coverage on the private market, which is a feature of most Republican plans.

Some Republicans are proposing a variation - in effect giving beneficiaries a choice between higher premiums and higher deductibles. Stanford University professor Alain Enthoven, one of the country's leading experts, and Sara Singer, writing in the New York Times, see great dangers in that approach. Healthy people may prefer low premiums and high deductibles. The sickest would choose low deductibles. That would separate those needing little care from those needing a lot of care, and the cost of caring for them would rise faster and faster.

Robert Ball, who, as Social Security commissioner administered Medicare from its start, recalled to me that the idea of variable premiums and deductibles was proposed in the early days, and he said then that he simply could not administer such a system. What he worries about today is that the government contribution to Medicare from general revenues will be capped, which will essentially mean the end of Medicare as an entitlement. He worries also that the package of benefits will not be guaranteed and will suffer from steady erosion.

What is not clear is what Democrats would do about the coming Medicare crunch. Some are talking of partially privatizing the system by having providers bid competitively on a set package of benefits.

Opinion polls show most Americans agree that ''some kind of drastic action is needed'' on Medicare. But, as the Medicare debate heats up in the fall, exchanges of angry rhetoric are not going to make it easy for the public to keep its eye on what is being proposed: Will health care providers be pressured to skimp on benefits? Will higher premiums and higher deductibles introduce new inequities? Will the entitlement survive?

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