THE STRICT budget-control measures that Congress now uses have forced action on many controversial issues that Congress had previously ducked. Whether you view this side effect as a virtue or a vice, there is no question that some of the decisions being made are long overdue. An example is the proposal voted by the full Senate and by the House Ways and Means Committee to extend Medicare hospital insurance coverage to federal workers.
It's not a good idea to make major changes in basic social insurance programs strictly to meet short-term budget targets, but the case for covering federal workers under Medicare rests on much stronger grounds. No doubt the several hundred million dollars a year that will be raised by requiring federal workers to pay the 1.3 percent hospital insurance tax paid by other workers will be a welcome addition to the Medicare trust fund that is headed for serious trouble a few years hence. But the issue is more one of fairness than of financing.
The simple fact is that the vast majority of federal workers already get full Medicare hospital insurance coverage while escaping the Medicare payroll tax for most of their working lives. A study done a few years ago by Robert Meyers, now executive director of the National Commission on Social Security Reform, found that by age 65, at least 80 percent of federal retirees had full Medicare coverage on the basis of a few years of private sector work. An additional 10 percent are probably covered on the basis of their spouses' earnings.
Up until now, the situation hasn't been intolerably unfair because, owing to the relative newness of the Medicare system, no retiree has paid much for his Medicare coverage. But there is no excuse for perpetuating a system that lets one group of retirees --with above-average pensions--draw hospital benefits mostly paid for by other less-favored workers. That is why the last National Commission on Social Security--appointed under the Carter administration--recommended that Medicare coverage be immediately extended to federal workers.
Contrary to claims by government worker unions, extending Medicare coverage will cost the government practically nothing in additional benefit payouts because almost all federal retirees draw Medicare benefits anyway. It will simply make them pay the fair cost of that coverage. And the Medicare tax won't be a full add-on to worker payroll taxes since the special medical insurance plans for which federal retirees qualify can now be redesigned into lower-cost Medicare supplemental plans, eliminating dual coverage.
Of course, it would be much better if not only Medicare but also the retirement and disability parts of Social Security were extended to government workers as well. That would eliminate the unfairly high cash payments that most federal retirees also get from a few years of private sector work. But that is an issue that--without the protective coloring of the budget reconciliation process--Congress has not had the courage to touch.