The Senate Finance Committee voted yesterday to cut more than $17 billion from the basic federal health and welfare programs over the next three years, including the largest cuts ever made in the Medicare program for the aged and disabled.
The cuts were the first to be voted in specific programs by any committee under the broad budget resolution that Congress adopted earlier this week.
The $13.6 billion in Medicare cuts would alter significantly the way the government reimburses hospitals, and to a lesser extent doctors, under that program. If enacted, the new system in effect would be a form of partial price controls in health care, with maximum payments for various services and limits on how much such payments could rise from year to year. Patients also would have to pay more for their care.
Chairman Robert J. Dole (R-Kan.) used proxies from absent Republican senators to override occasional dispirited objections from a handful of Democrats and move the cuts through the committee. These cuts do not necessarily mean that spending on Medicare and the other affected programs will be less next year than this, just that they will be less than they otherwise would be. The budget resolution also calls on the Finance Committee to vote about $21 billion in tax increases for this year; Dole said he hopes to vote on them next week and complete the work by next Thursday.
In addition to the cuts in Medicare, the committee voted $1.6 billion in cuts over the next three years in Medicaid for the poor and $2 billion in cuts in welfare programs.
There are already limits on the basic daily rate the government will pay hospitals for room and board under Medicare.
The new bill would apply similar limits to so-called ancillary services such as X-rays, blood tests and use of operating rooms. It would also limit year-to-year increases in total payments per day for Medicare patients in each hopsital to 10 percent, in a provision reminiscent of the cost controls President Carter repeatedly proposed and failed to move through Congress. Eventually this provision would be replaced by a system of prospective reimbursement, fixed payments for designated services rather than payment of all or most costs incurred.
The amounts Medicare patients would have to pay for their care before Medicare kicks in would also rise each year, by the same percentage the consumer price index rises. Under this provision this so-called deductible, which is now $75, would go up to $80 in 1983 and keep rising thereafter. Over the next three years this would mean an estimated $370 million in extra payments for Medicare patients.
The monthly premium charged Medicare recipients for the doctor-bill part of the program would also go up each year, from the current $11 a month to an estimated $15.50 by 1985 or about $1.20 more than under existing law. This provision would cost insured people an estimated $850 million over the next three years. A similar provision in the Medicaid program would allow the states to charge patients "nominal" co-payments on all services except some for pregnant women and children; this provision would permit charges of about 50 cents to $3 per visit to a doctor and would raise an estimated $150 million over three years.
Several Democratic efforts to block some of the increases in out-of-pocket patient costs were defeated, on votes ranging from 12 to 5 to 15 to 4. The committee then approved the Medicare and Medicaid cuts by 13 to 6 with Democrats Bill Bradley (N.J.), Max Baucus (Mont.), Daniel Patrick Moynihan (N.Y.), George J. Mitchell (Maine.), Lloyd Bentsen (Tex.) and Republican John H. Chafee (R.I.) voting against. Senior committee Democrat Russell B. Long (La.), Harry F. Byrd Jr. (Ind.-Va.) and David L. Boren (D-Okla.) joined with the Republicans in voting for the cuts.
The welfare cuts were approved 14 to 3 with only Bradley, Moynihan and Mitchell voting against. Dole pointed out that presidential requests for a compulsory national "workfare" program for welfare recipients and for cuts in child adoption, foster care and social service grants to the states were not included. Even so, the committee cuts would save over $1 billion more from fiscal years 1983 to 1985 than required by the budget resolution.