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  •   Shalala Outlines Approach to Medicare

    By Spencer Rich
    Washington Post Staff Writer
    Thursday, October 10, 1996; Page A04

    Secretary of Health and Human Services Donna E. Shalala laid out a potential two-step bipartisan scenario yesterday for working out solutions to Medicare's short-term and long-term financing problems in the next two years.

    Addressing one of the most difficult and politically inflammatory issues now facing Washington lawmakers, Shalala said she thought the administration could work with Congress to cut a deal that would shave about $100 billion from the growth of Medicare over the next six years. Cuts of that magnitude would extend the life of the Medicare trust fund that finances hospital care from 2001, when it is projected to run out of money, to mid-2006.

    Shalala declined to spell out precisely how those cuts would be achieved, but suggested they would come by reducing fees paid to hospitals, doctors and other health care providers.

    Speaking at a breakfast with health reporters yesterday, Shalala also said she hoped a deal could be achieved early next year, after the new 105th Congress takes office.

    With the short-term problem addressed, Shalala said, lawmakers could then move quickly to form a bipartisan commission that would include members of Congress or their designees to address the larger question of how to pay for the Medicare costs of the huge Baby Boom generation that will start retiring in 2010. She said the commission might take about a year to reach agreement, and Congress could then enact the commission's recommendations before adjourning in 1998.

    House Ways and Means Committee Chairman Bill Archer (R-Tex.) said Shalala's invitation to participate in a bipartisan commission is "hard to take . . . seriously" while Democrats, as part of their election campaign, are running highly partisan ads "falsely accusing Republicans of `cutting' and `slashing' Medicare."

    Both President Clinton and Republican presidential nominee Robert J. Dole spoke favorably in last Sunday's televised debate about the idea of a commission. But Shalala's statement yesterday was the first to propose a definite time frame for action, obviously predicated on the assumption that Clinton will be reelected.

    In budget negotiations earlier this year, Clinton proposed that, to meet short-term financing problems, Medicare be cut $116 billion over the next six years; Dole has proposed $168 billion. Neither side has come up with a long-range plan. President Clinton has accused Republicans of wanting to cut Medicare excessively in order to provide a tax cut for the well-to-do. Republicans have accused him of scaring seniors and demagoguing the issue to win votes.

    At the breakfast, Shalala also said that both the president and Dole "have talked about kids" and how to extend health coverage to about 10 million children who don't have it, and she hoped some agreement could be reached on that too. But she said Dole's suggestion that perhaps using Medicaid in some way to achieve this might not be the right strategy, though she did not spell out other alternatives.

    © Copyright 1996 The Washington Post Company

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