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Democrats Develop Plan to Reform Medicare; Less Severe than GOP

By Edwin Chen
Los Angeles Times
WASHINGTON

In a major tactical shift, congressional Democrats are developing their own alternatives to the GOP Medicare reform plan in an effort to markedly soften the drastic changes sought by the Republican majority.

The Democratic gambit - with White House backing - injects a new dynamic into the acrimonious and partisan debate just as it nears a crescendo in Congress, and it is fraught with political perils for would-be Medicare reformers in both parties.

For the nation's 37 million Medicare beneficiaries, the reversal by Democrats all but ensures Congress will fundamentally restructure a Great Society program, with higher out-of-pocket costs and a distinct move toward managed-care delivery systems.

Although the plans are not complete, House Democrats are striving to limit reductions in future Medicare spending by $89 billion over 10 years. In the Senate, Democrats are working to find a somewhat greater level of savings but still far less than would be required under the GOP's goal of $270 billion over seven years.

Development of the Democratic proposals is tantamount to a death-bed conversion. For months, they have been accusing the GOP of "cutting" Medicare to pay for a broad tax cut.

But that argument simply did not catch on. Instead, Democrats have been excoriated by even some of their staunchest constituents for seeking to obstruct the Republicans and trying to frighten the elderly-and score political points in the process.

So congressional Democrats are about to leap aboard the Medicare reform bandwagon.

"We're telling our members: we don't have to fall into the Republican trap and be forced into doing things we don't want to be doing," one Democratic House staff member said Monday.

Amid broad agreement that Medicare's hospital trust fund will be bankrupt by the year 2002, Republicans are proposing to save $270 billion in Medicare spending over the next seven years.

The savings can be achieved, they say, largely by slowing the annual rate of growth in spending, from about 10 percent to just over 4 percent, and by channeling seniors into less expensive, managed-care settings.

Similarly, President Clinton says his less drastic plan would achieve $124 billion in Medicare savings, over 10 years.

Under both approaches, hospitals and physicians would encounter deep reductions in payments. And beneficiaries would pay more in monthly premiums for physician services - about $90 under the GOP formula and $82 under Clinton's formula, by the year 2002.

Most Democrats in Congress have argued against any sharp reductions. But that argument has failed to resonate - and drawn sharp criticism.

Even the liberal editorial pages of The Washington Post recently accused Democrats of engaging in "demagoguery, big time." The searing critique quickly made its way into Republican ads promoting the GOP Medicare plan.

"The Democratic failure is that people now believe that the program is going bankrupt - and that Democrats didn't address the issue," said Robert Blendon, a Harvard University health policy polling expert.