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| WIDENING THE NET
January 6, 1998NEWSHOUR TRANSCRIPT |
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President Clinton has proposed making younger retirees and laid-off workers eligible for Medicare Health Insurance. He said the plan would pay for itself because the new recipients would pay fixed premiums. After an excerpt from the President's press conference, Secretary of Health and Human Services Donna Shalala discusses the plan from the White House perspective,and Congressman Bill Thomas of California gives the Republican response.
MARGARET WARNER: Now a Republican response from Congressman Bill Thomas of California. He chairs the House Ways & Means Committee's Health Subcommittee, which oversees Medicare. Welcome, Congressman. Your reaction to this idea.
A RealAudio version of this segment is available.
NEWSHOUR LINKS:
January 6, 1998
The White House discusses its Medicare proposal.
November 20, 1997
Secretary Shalala discusses the consumer bill of rights for health care.
August 7, 1997
The budget bill plans to carve $115 million off federal health care spending.
July 31, 1997
A discussion on Columbia/HCA's defrauding of Medicare.
July 15, 1997
Senator John Breaux (D-LA) and AARP representative Martin Corry debate changes to the Medicare system.
Browse the NewsHour's coverage of Medicare.
OUTSIDE LINKS:
U.S. Department of Health and Human Services
REP. BILL THOMAS, House Ways & Means Committee: Well, Margaret, I think your questions, first of all, were very good. The Secretary's use of the analogy with Social Security is simply flat out wrong. Social Security gives you a fixed amount of money. If you start taking it earlier, 62 rather than 65, you get a diminished amount per month because you're going to be getting it longer. Medicare has to do with health costs. And she said several times that you would be dealing with people who have pre-existing conditions. The people who be attracted to this program not only are those who are relatively affluent, who can pay for it, but who also have serious health problems. There will be an enormous cost to cover these people, disproportionate to the amount that they will pay in. Yet, when they turn 65, the amount they will be assessed will be a fixed amount. Regardless of your health condition under the President's plan you will be paying a fixed amount. There is no way actuarially that that individual will be able to pay the full costs of their medical coverage. That's just one of the problems.
Can $300 a month really cover the health costs of people entering the system?
MARGARET WARNER: So, in other words, are you saying that the $300 a month plus the small up charge at the end, that just is not realistic?
REP. BILL THOMAS: Well, especially if you hang a sign out front inviting everyone with pre-existing conditions to join the health care program prior to your eligibility, which has always been 65. You will pay a fixed amount before you're 65 and a fixed amount plus a very small additional fixed amount. That simply is not actuarially sound. It also--if you listened to the Secretary carefully--requires Congress to repeal some provisions in the fraud and abuse area that the new Republican majority put in because they were tougher; they were more responsible. That should not be a source of funding for this program.
MARGARET WARNER: And why does it do that?
REP. BILL THOMAS: They have tried several times in trying to deal with Medicare to repeal sections that we were able to get in the law. You will find when you get the details of their fraud and abuse program that it will be an attempt to repeal provisions that are currently in law. But, of course, we don't have any details from them yet, so you don't know that. I just happen to know that.
MARGARET WARNER: All right. But let's--I mean, they keep saying this is going to be self-financing. The Secretary said that. If you could be assured, or a mechanism could be set up, that it was self-financing, would you support it then?
Other ways to help older Americans between jobs.
REP. BILL THOMAS: Well, remember, that's just one component, the Medicare component. The President also took the so-called Cobra, the creation that was to be a stepping stone between jobs--
MARGARET WARNER: Explain that. Explain very briefly what Cobra is because we didn't use that term in our description.
REP. BILL THOMAS: It's an ability to pay out of your own pocket to get the insurance that your employer had offered while you're looking for a new job. It was a temporary program. It lasts 18 months. The President is now proposing that people who at 55 can tap into that employer fund not for the 18 months as a stepping stone to another job but for an entire 10 years. That will send ripples through the employers' insurance program that were never contemplated when we set that program up. In addition, there are a number of other suggested changes that the President is making of a piecemeal nature that will have an enormous impact on other programs. What I don't understand, Margaret, is that the President just put into law and named members to the Medicare Commission. That commission is to report in 13 months. Its responsibility--and I'm privileged to be a member of that commission--is to re-think Medicare. In fact, one of the things you know we're going to look at is the question of the early retirees. This is becoming more and more a problem in the country, especially with those jobs dealing with safety and security--police, fire, and others--retiring at 55. This is a problem we have to face. To try to jump in now before the commission offers a comprehensive, whole program solution is really a question that I think the President and others need to answer. Why now? Why not wait the 13 months to see the overall program?
MARGARET WARNER: Do you acknowledge that the President and the secretary and the administration have put their finger on a problem that is, as he described it, the workplace is changing; it's no longer that you work at the same employer till 65, you get your gold watch, and you go into Medicare; that people are being downsized out of jobs, and that there is a problem there?
REP. BILL THOMAS: Absolutely, there's a problem there, but, remember, the Secretary said, jobs, jobs, jobs. They focus on health care coming from the employer. That is an anachronism. We need to look at the tax code and fundamentally restructure the health care benefits. There is a mal-distribution of health care benefits in the tax code. By chance of employment you get health care or you don't. What they're doing is taking the current system, which is flawed, and adding various bits and pieces, which will only flaunt that much more.
MARGARET WARNER: As opposed to what?
"We need to fundamentally rethink the tax code."
REP. BILL THOMAS: What we need to do is fundamentally rethink the tax code, empower individuals, let them get the tax credit, so that you don't rely necessarily on your employer; you can do that for pool purposes, but you then would be the tax credit; you would purchase and get a tax credit, just as the employer now gets a tax credit for your health provision. That way, people who are well off between 62 and 64, waiting for Medicare, can purchase health care in the private market. They would get the tax credit for it. Those people 55 to 65 we can build a retirement program around health care for them on their own individual initiative. The thing that really probably bothers me as much as anything, though, Margaret, about the President's program is that he attempts to take these steps, arguing for people who need coverage, and then leaves large numbers of these people uncovered.
MARGARET WARNER: Those who can't afford it?
REP. BILL THOMAS: Exactly. And your question, which I don't think was answered as up front as needed to be, was that, well, of course, what will happen is there will be an inequity and there will be politicians who will rush in to fill the inequity by putting up money for those who otherwise couldn't get it. That is what always happens. What we need to do--and I was hoping the President would wait until the Medicare Commission reported--again I said as a member of the Medicare Commission I had a lot of ideas that I wanted to try out on the other members--to create a more fundamental shift in the entire health care delivery system than just with Medicare. We seem to have left out those young people who are currently paying into Medicare and who are going to continue to pay and not get the kinds of benefits that seniors are getting now. What the President's proposal does is simply truly put more people into the pool, and the people who are going to be funding that are the young people. This is a societal problem, a simple fix between 62 and 64, or even creating unanticipated problems between 55 and 65 is not the solution. The solution is a fundamental rethink of the delivery system and of the tax consequences of who pays.
The political implications of competing Medicare proposals.
MARGARET WARNER: All right. But you brought up politicians and politics as a political matter, given how people in this age group vote and so on, and this is targeted to help people in that 55 to 65 age group. Can Republicans, do you think, successfully oppose this?
REP. BILL THOMAS: Well, now you've asked a different question. Is this a very smart political move by the President getting ready for the '98 elections? Of course it is. The President and his party can't resist playing the political aspect of Medicare. I just can't believe that the short time that we worked together--and we did work together in a bipartisan way--we thought the solution was the bipartisan Medicare Commission offering proposals that would move us forward.
What the President has done has basically challenged that fundamental premise that we're going to work together in a bipartisan way. The proposals are not sound. They do not actuarially cover their costs, and what they do is, in fact, lock us into that employer-based health care system, which is one of the problems that we have. We should empower individuals, let the tax credit go to the individuals. It doesn't have to go to the employer. Once you look at the world that way a lot of these so-called problems, based upon employment or not employment, the employer paying for health care or not paying for health care disappear.
MARGARET WARNER: All right. Congressman, thank you very much.
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