Breaux-Thomas:

A medicare wrecking program

By Will Parry

The Senate Republican leadership has announced it will soon bring to the floor for a vote a plan to restructure Medicare It will be, without a doubt, a Medicare-wrecking plan. Known as the "Breaux-Thomas proposal," after the co-chairs of the now-disbanded Commission of the Future of Medicare, the plan drew the unanimous opposition of the Leadership Council of Aging Organizations when it was first unveiled last March.

Ten of the 17 members of the bipartisan commission endorsed it, but it could not be presented to Congress as a formal recommendation for lack of the required 11-vote super-majority. The commission was stacked with 10 dedicated privatizers -all eight Republicans and Democratic Senators John Breaux of Louisiana and Bob Kerry of Nebraska. The remaining seven Democrats, although divided on some issues, held fast against pressures to provide the critical eleventh vote.

The Leadership Council of Aging Organizations is an authentic voice for the 39 Medicare recipients. Its 27-member organizations include the National Council of Senior Citizens, the Gray Panthers, the Older Women's League, and organizations representing African-American, Asian-Pacific and Latino seniors. The council warned the commission that Breaux-Thomas "could undermine current Medicare guarantees and be detrimental to the health and well-being of present and future Medicare beneficiaries."

In a five-page letter to Breaux, the council posed 55 questions about the plan, declaring, "We cannot consider supporting a Medicare reform proposal without specific answers. The answers were never forthcoming and the plan, essentially unchanged, has now been embodied in legislation before the Senate."

A carefully-documented 13-page critique of Breaux-Thomas by Families USA, the respected health-care watchdog organization, made the following points:

Currently Medicare benefits and cost-sharing are clearly defined in law. Breaux-Thomas, in failing to provide a statutory guarantee of precisely defined benefits, would leave beneficiaries "vulnerable to erosion in the value of benefits over time as health-care costs increase."

Today, fee-for-service Medicare carries a Part B deductible of $100 and a hospital deductible of $768. Breaux-Thomas would establish a combined deductible of $350, meaning higher out-of-pocket expenses for the 80 percent of beneficiaries who are not hospitalized each year.

Under traditional Medicare, beneficiaries can be almost certain of choosing and keeping their own physician. That is not necessarily the case under Breaux-Thomas.

Breaux-Thomas will make it easier for HMOs and other health plans to discriminate against sicker people who incur high costs. This opens the door to still more unscrupulous "bait-and-switch" plans, which hook enrollees with desirable benefits and then water down or eliminate them later. An Urban Institute projection foresees a doubling of out-of-pocket costs by 2025.

Three out of four Medicare beneficiaries regularly use several prescription drugs. Breaux-Thomas ducks the issue, leaving it for later resolution. Up to 1.7 million people ages 65 to 67 would be left uninsured if the Breaux-Thomas proposal to raise the age of eligibility to 67 were enacted. And this at a time when employers have steadily reduced retiree health coverage and when there are already 44 million people without health insurance.

Breaux based his plan on the theory that seniors would get better and cheaper coverage by choosing among competing health plans. But Rep. Jim McDermott (D-Wash.), a commission member, replied that 11 million beneficiaries would have no choice at all. They live in more than 2,000 counties "that do not currently have Medicare managed care, and because of the lack of providers, are unlikely to develop HMO-type programs," McDermott said.

Bruce Vladeck, former head of the Health Care Financing Administration, was another Democratic appointee on the commission who rejected the Breaux-Thomas scheme: "The notion that competition in health care for the elderly will cut costs and improve quality is a fantasy," Vladeck said. He predicted that the Breaux plan would "segment the market," steering the poor into low-cost, poor quality HMOs, while "the rich will flock to fee-for-service."

Vladeck also warned of HMO "cherry picking" - the practice of enrolling only the healthiest applicants, leaving the chronically ill for fee-for-service coverage. That would eventually drive fee-for-service premiums so high that only the rich could afford them.

Will Parry chairs the Puget Sound Chapter of the National Council
of Senior Citizens.