Why Health Care Hot Potato For Elderly Can Be Touched

IT'S August 1989, and senior citizens are hopping mad. Congress has approved new Medicare benefits to protect against catastrophic medical expenses, and the elderly don't want to pay extra for it.

In one of the most striking scenes from any August recess in memory, Rep. Dan Rostenkowski (D) of Illinois, then one of the most powerful members of Congress, is chased down in his district by angry seniors chanting ''liar!'' and ''impeach!'' Other members are deluged with protest.

The message: Increase fees for Medicare, and you touch the high-voltage ''third rail'' of politics. Congress quickly repealed the law.

Cut to the fall of 1995. The entire Medicare system is on the table. Republicans are contemplating an overhaul of the program that would nearly double the fees elderly pay, and could limit their choice of doctors.

The protest has been polite, and opinion polls show surprising support for parts of the Republican plan. A Los Angeles Times survey last week found 60 percent support for an across-the-board hike in fees elderly must pay for Medicare. About the same number supports a plan to encourage seniors to join managed-care programs, which would save money in restricting choice of physicians.

What ever happened to the ''third rail?'' Social Security, the main third rail, remains off the table in the Republican budget-cutting plan. But the other key pillars in the national system of support for the elderly - Medicare, the federal government's health-insurance plan for seniors, and Medicaid, the program for the poor that funds a lot of nursing home costs - are most definitely in play.

Between the two programs, the Republicans plan to save $452 billion over seven years through cost-cutting. And they know they're playing with electricity. Senior citizens pay attention to issues and they vote; they represent one of the most powerful lobbies in Washington. But times may be changing. Ironically, talk over Clinton's health care reform plan and rumblings over Medicare's imminent bankruptcy may have paved the way for GOP reforms.

''People know that the Medicare trust fund is going broke,'' says Susan Tanaka of the Committee for a Responsible Federal Budget. ''In health care, people are conscious of costs going up and so they're more willing to entertain change. Among the working-age population, everybody is seeing the rise of managed care, so there's less sympathy for the elderly who want to keep fee-for-service [care].''

Gene Wright, a research associate at the American Association of Retired Persons, sees the apparent shift in attitude more as a result of Republican shrewdness than a real change of heart. ''The Republicans have been able to frame the issue in their own terms,'' Mr. Wright says. ''They were clever in not releasing specifics until the last minute. Seniors have been waiting for the second shoe to drop: What are they proposing and how will it affect me?''

Republican lawmakers have operated in blitzkrieg formation. In the House, they introduced their Medicare reform legislation last Thursday, held a one-day hearing the next day, and said, ''No more hearings.'' Angry Democrats staged a protest hearing outside the Capitol. On Medicaid, the House Commerce Committee approved monumental legislation last week that would end the federal program and turn it over to the states only three days after the plan was introduced.

House Speaker Newt Gingrich knows he's treading on dangerous turf. Speaking on television recently about the Medicare plan, he said: ''It's so emotional that unless we are very careful and very educational and very straightforward, literally, I think, you could see the whole support for what we're trying to do crumble.''

Pollsters have also discovered that the public does not support aspects of Medicare reform they thought would be easier to sell than higher premiums and a shift to managed care. The Los Angeles Times survey reported that 58 percent of respondents opposed cuts in Medicare payments to doctors and hospitals if it meant doctors might refuse Medicare patients. Respondents expressed concern that costs might be passed on to younger patients.

The Democratic approach is not to deny there's a crisis, but to point to the complete picture of budget-balancing. The GOP is squeezing savings out of health care for the elderly and poor to finance a tax cut for the rich, Democrats argue. So far, polls show, only a third of Americans agree with that argument.