The Medicare charge to patients for their first day in the hospital is expected to take a big jump in 1987 to $572, according to preliminary estimates by the Department of Health and Human Services, the second major increase in two years. The increase of $80 over 1986 charges will far exceed the rate of growth in Medicare costs or the medical inflation rate.
At the start of 1986, the first-day charge, which is the amount patients must pay out of their own pockets when they go into the hospital, rose from $400 to $492, the biggest dollar increase in the history of the program.
After the first day, patients can stay free the second through 60th days. One-quarter of Medicare's 30 million beneficiaries enter hospitals annually.
The prospect of a second big increase brought protests from Sens. Edward M. Kennedy (D-Mass.), John Heinz (R-Pa.) and Max Baucus (D-Mont.), Rep. Edward R. Roybal (D-Calif.), chairman of the House Committee on Aging, the National Council of Senior Citizens and the American Association of Retired Persons.
By 1991, according to figures cited by Baucus in a letter to HHS, the first-day payment may be as high as $732.
Ironically, the prospective increase results from success in holding down Medicare's per-admission costs and reducing average lengths of stay. Increases in the first-day payment are based on the average daily Medicare costs per hospital stay.
A new Medicare system for paying hospitals gives them a flat fee for each stay, providing an incentive to discharge patients quickly. With lengths of stays declining, but payment per stay remaining constant, the first day is now a larger proportion of the total payment. The average hospital stay is under nine days.
A boost to $572 for the first-day payment in 1987 would represent a 43 percent rise in two years in out-of-pocket payments, a rate of increase more than four greater than the national rate of medical inflation, and seven or eight times higher than the increase in income of the elderly, Roybal aides said.
Last year, attempts by Kennedy and Heinz to block the increase from $400 to $492 were defeated on the Senate floor. Heinz did win language asking the Senate Finance Committee to modify by April 15 the first-day increase formula, but no action has been taken.
Yesterday, Eric Shulman, spokesman for the National Council of Senior Citizens, said, "Once again the older people are going to be paying a heavy price" for the government's success in cutting lengths of stay.
John Rother, AARP director of legislation, called the prospective 1987 increase "grossly unfair -- it's a tax on the sick."
Kennedy said yesterday, "It is simply wrong to tolerate a system in which the government reaps all the savings while the senior citizens are saddled with all the costs." Heinz said, "While we are told on the one hand that Medicare hospital costs are under control, on the other we are told that beneficiaries will have to pay another 16 percent."
Baucus, in an April 9 letter to HHS, said, "The deductible hits hardest on those who are least able to afford quality health care services."