Washington Juggles Medicare Hot Potato

REPUBLICAN DILEMMA

AS Medicare approaches insolvency, Congress's ruling Republicans are prancing on the political equivalent of hot coals.

Republicans say they must reform the health-insurance program for the elderly to prevent it from going bankrupt by the year 2002. They also promise to balance the federal budget by the same year.

To achieve their goals, Republicans have projected cuts in Medicare of $250 billion to $300 billion over seven years. But they don't want voters to think the budget is being balanced on the backs of senior citizens -- or that cuts in Medicare would be used to finance tax cuts for the rich, as the Clinton administration charges.

The Republican dilemma is thick with irony. ''Last year, these guys fought health-care reform,'' says Patrick Burns, a spokesman for the National Council of Senior Citizens, which opposes Medicare cuts. ''Now they're the ones talking about moving people into managed-care networks.''

The elderly -- a demographic group that votes in proportionately high numbers and has powerful lobbyists in Washington -- have traditionally taken a dim view of proposals to cut Medicare.

A recent poll conducted by Robert Teeter, a Republican, and Peter Hart, a Democrat, showed that 42 percent of the public would be less likely to reelect their member of Congress if he or she voted for Medicare cuts. However, a majority said it would either make no difference (39 percent) or make it more likely (15 percent) they'd reelect their member. But the 42 percent opposed represents a large plurality that shows the strength of Medicare as a voter issue.

''Older Americans are willing to do their part [to balance the budget] if they see a package that's fair and balanced,'' says Martin Corry, director of federal affairs at the powerful American Association of Retired Persons. But, he adds, that means they want any cuts to be shared equally.

As with President Clinton's ill-fated attempt at health-care reform last year, a crucial element in the battle over Medicare reform will be how the issue is framed. And the framing has begun in earnest: As the House Ways and Means Committee opened hearings yesterday on Medicare's future, the White House was kicking off a Conference on Aging, attracting more than 2,000 senior-citizen activists to town. Medicare's woes topped the agenda.

The political sniping over Medicare has also begun in earnest. Last Friday, House Speaker Newt Gingrich (R) of Georgia demanded the Clinton administration propose a solution. On Monday, White House chief of staff Leon Panetta wrote a letter back saying, essentially, ''you go first.''

''The American people are still waiting to see the new Republican majority fulfill this responsibility,'' the letter said.

Mr. Gingrich and Senate majority leader Bob Dole (R) of Kansas have proposed that Medicare be debated separately from the budget, to ensure that any savings from Medicare cuts remain within the Medicare system. Mr. Panetta dismissed this as an ''accounting gimmick.''

GINGRICH has suggested reforms that would offer the 36 million participants eight or nine choices of health insurance, including the option of keeping their current arrangement. But a formal proposal will not be issued until September, Republicans say.

Mr. Burns of the National Council of Senior Citizens argues that the crisis in Medicare, which is projected to cost $176 billion this year, is part and parcel of the overall crisis in the economics of health care in the United States. Medicare's costs have been rising by 10 percent annually.

Burns says that a 1 percent increase in FICA taxes (half paid by employers, half by employees) would make Medicare solvent for decades, though it would only address the symptom. The solution, he says, lies in cost containment of the entire health-care system, which could be brought about by forcing competition through the organization of consumers into buying cooperatives. Essentially, that's the Clinton proposal from last year.

Ari Fleischer, a spokesman for the House Ways and Means Committee, disagrees. ''You do not have to have comprehensive health-care reform to solve the problems of Medicare,'' he told reporters.