March 1999: President Clinton rejects a Medicare proposal shortly before a bipartisan panel falls one vote short of sending the plan to Congress. (Reuters)

By Steve Fox
Washingtonpost.com Staff
Updated: May 5, 1999

Despite, or maybe because of Medicare's popularity, Congress and the White House have been unable to agree on what changes are needed to make the program financially viable for the next generation.

Republicans blame the White House for the failure of a bipartisan Medicare commission to agree on a longterm plan to overhaul the program. President Clinton and congressional Democrats, on the other hand, say GOP proposals to save billions by opening the federal health insurance plan to competition from HMOs and other private medical providers would decrease the quality of care.

In March 1999, after a year of discussions, the 17-member commission came within one vote of sending Congress a proposal. The plan, developed by Sen. John Breaux (D-La.), the panel's co-chairman, would have given private health plans greater control over the nation's health insurance program. Under the Breaux proposal, the government would no longer pay patients' bills directly or set prices for the services that Medicare covers. Instead, it would give patients money to pay insurance premiums, either for private managed-care plans or the traditional "fee for service" version of the program. Breaux's plan also included a controversial provision that would gradually raise the eligibility age for Medicare from 65 to 67.

• Final Breaux-Thomas Medicare Reform Proposal

Supporters of the Breaux plan criticized Clinton for not backing the proposal, accusing some Democrats of wanting to use Medicare as an issue in the 2000 elections. Clinton and most of the panel's Democrats argued that the Breaux plan would not save as much money as promised and ultimately could cost patients more money. Members of the commission also disagreed on how far Medicare should go to make it easier for patients to afford prescription drugs.

• Clinton Statement on Breaux Plan

Clinton promised to answer Breaux's Medicare proposal with one of his own. Two months before, in his January 1999 State of the Union address, the president proposed devoting 15 percent of the anticipated surpluses over the next 15 years – a total of nearly $700 billion – to Medicare. The previous year, Clinton proposed the largest expansion of Medicare in a quarter century, offering early retirees at age 62 and displaced workers as young as 55 the opportunity to buy health care coverage.

• Medicare Comments in 1999 State of the Union
• Medicare Comments in 1998 State of the Union
• Full Coverage of Clinton's State of the Union Addresses

While optimistic budget projections have lessened the need for immediate change, the new forecasts offer little evidence that financial pressures on the program will decrease in the long run. After all, the nation continues to get older.

Steve Fox can be reached at foxs@washpost.com