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Congress Debates Creating Medicare Home Co-Payment

By Robert Pear

The New York Times -- WASHINGTON

House and Senate negotiators working on Medicare legislation say they are seriously considering imposing a co-payment on home health care, one of the few Medicare benefits for which patients do not have to pay such charges.

Congress eliminated the co-payment in 1972, in an effort to encourage the use of home care as an alternative to nursing homes and hospitals, which are generally more expensive.

Just four days remain before a Friday deadline suggested by Republican leaders of Congress for completing work on the legislation, which would revamp Medicare and add prescription drug benefits, at an estimated cost of $400 billion over 10 years.

Several negotiators said on Monday that they were seriously considering a co-payment of $40 to $45 for each 60-day period in which a beneficiary receives home care. That is about 1.5 percent of the average cost of such care. For 60 days of care, Medicare typically pays $2,700 to $3,000.

Negotiators in a conference committee are trying to reconcile separate bills passed by the House and the Senate -- a big challenge with big political implications for President Bush and lawmakers of both parties. The House bill includes a co-payment for home care, but the Senate bill has no comparable provision.

Rep. Bill Thomas, R-Calif., the chief architect of the House bill, described the co-payment as a way to deter unnecessary use of home care.

“Requiring beneficiaries to share the cost of home health services encourages them to use care more prudently,” said Thomas, the chairman of the conference committee.

But home care agencies and advocates for the elderly criticized the co-payment as a “sick tax.”

Most supporters of the co-payment are Republicans. But opposition comes from both parties.

“A home health co-payment of $40 to $50 per episode would impose a significant additional burden on those beneficiaries who can least afford it,” said a letter to the conference committee, drafted by Sens. Susan Collins, R-ME, and Russell D. Feingold, D-WI. Fifty-seven senators, including 24 Republicans, have signed the letter.

Medicare spending on home care soared in the early 1990s. But it fell to $10 billion in 2002, from $17.5 billion in 1997, as the government adopted a more restrictive method of payment and cracked down on fraud. The Congressional Budget Office predicts that annual spending will triple in the coming decade, to $32.9 billion in 2013.

Thomas A. Scully, administrator of the federal Centers for Medicare and Medicaid Services, said the Bush administration had not taken a formal position on the co-payment. He said he personally believed that “a good case can be made for charging a modest co-payment to people who can afford it.”

A Republican working on the Medicare bill said, “A co-payment seems inevitable.” Any effort to block the co-payment at this stage would probably touch off a big fight, he said.

Another Republican, Rep. John E. Peterson of Pennsylvania, said he argued against the co-payment last week in a meeting with Thomas.

Peterson, said he came away from the meeting with the impression that “there’s likely to be a co-payment” on home health care. Peterson is not a member of the conference committee, but is closely following its work.