Joseph A. Califano Jr., the former Health, Education and Welfare secretary, yesterday made his first major appearance on Capitol Hill in nearly three years to blast President Reagan's proposals to cut Medicare and Medicaid. He called them "less a thoughtful health plan than a politically adept transfer of the tax burden to states, cities and insured patients."
Califano, who as a White House aide helped Lyndon B. Johnson formulate the Great Society legislative program of the 1960's, told the House Aging Committee it was "nonsense" to pretend that a "social safety net" for the elderly is being preserved.
He said the government should be thinking of how to fill in the gaps in the two big medical programs because "a key test of the moral fiber of a society is how it treats its elderly." Instead, he said, Reagan has come up with a "New Federalism" plan that "seems less a true federal assumption of Medicaid than the wolf of budget-cutting in the sheep's clothing of federalization."
The feisty Califano added that there are three statements that deserve "great skepticism: The first is, 'The check is in the mail.' The second is, 'I gave at the office.' And the third is, 'I'm from the Reagan administration and I'm here to help the states.' "
Challenged by Republicans on the committee to come up with ways to get medical costs in hand, Califano said he had three: stop cutting alcoholism and anti-tobacco programs, because alcohol and smoking contribute enormously to health costs; as a temporary device, impose a hospital cost-containment system of the type he advocated as secretary, permitting hospital charges to rise only as much as actual costs of a market basket of goods and services plus a fair allowance for new services; third, develop a prospective reimbursement system, fixing in advance the amount hospitals can receive for services in a given year.
Carolyn K. Davis, who administers the Medicare and Medicaid programs in the Department of Health and Human Services, defended the administration proposals, declaring that legislation is being readied to bring down health care costs through enhanced competition and through prospective reimbursement.
"What I'm trying to do is protect the integrity of the Medicare program," said Davis, adding that Reagan is asking a small payment from Medicaid patients on use of services because a "nominal copayment does deter overutilization."
Chairman Claude Pepper (D-Fla.) opened the hearing by declaring that Reagan's proposals "constitute a kind of Chinese water torture--drop after drop after drop until the overall burden becomes too much for the elderly to bear."
Pepper said a study by the committee shows that under Reagan's proposals, by 1987 all Medicare patients "will have to pay as much as $107 themselves before Medicare will pay the first penny toward their medical bills; over one million homebound elderly persons who need home health care will have to pay as much as $1,200 a year for this care and 140,000 additional Medicare beneficiaries will have to pay considerably more from their own pockets because their physicians charge more than Medicare allows."
Charles R. Buck Jr., secretary of health and mental hygiene for Maryland, said the Reagan cuts would mean a state Medicaid loss of $25 million to $39 million, and pose "an immediate threat to the health of our nation's older citizens."