The House Ways and Means subcommittee on health voted yesterday to cut Medicare outlays by $1.5 billion in fiscal 1988, primarily by holding increases in hospital payment rates to one percent, or about one-fifth of the anticipated inflation rate for products that hospitals buy.
The subcommittee, striving to meet budget targets, also voted curbs on Medicare payments to doctors, but did not reduce benefits for Medicare's 31 million enrollees.
Subcommittee Chairman Fortney H. (Pete) Stark Jr. (D-Calif.) and senior GOP member Willis D. Gradison Jr. (Ohio) indicated they were unhappy with the budget constraints. "We've been required to make cuts of $1.5 billion in a program which, in my opinion, doesn't have $1.5 billion of fat in it," Gradison said.
In other action yesterday, the House Energy and Commerce subcommittee on health approved a plan by Chairman Henry A. Waxman (D-Calif.) to allow welfare mothers and fathers who obtain jobs and work their way off eligibility for Aid to Families With Dependent Children to continue receiving Medicaid benefits for 24 months and, at state option, for another 18 months after that. The provision would replace a six-month job provision in the work-and-welfare bill approved by the Ways and Means Committee.
Waxman said loss of Medicaid is a serious disincentive to work and that his provision would protect 470,000 welfare families with an average of about 2.2 children per family. The provision would cost $470 million over the first three years.
Meanwhile, Democratic leaders of the Ways and Means, Energy and Commerce, Rules and Aging committees -- meeting with Speaker Jim Wright (D-Tex.) late Tuesday -- agreed on a compromise outpatient drug-benefit provision for the Medicare "catastrophic" insurance bill.
Under the compromise, when the bill goes to the floor, it will include a provision requiring Medicare to pay for 80 percent of the cost of outpatient prescription drugs exceeding $500 a year per beneficiary. The cutoff had been set at different levels in earlier plans, with Ways and Means proposing payment for 80 percent of costs above $800, and Energy and Commerce seeking payment for all costs exceeding $500.
Rules Committee Chairman Claude Pepper (D-Fla.) said, however, that he will seek a House vote on his plan to add home-care benefits for the aged, disabled and children who cannot care for themselves, at a cost of $27.5 billion over five years. That amount is almost equal to all other provisions of the catastrophic-illness plan combined.
The Medicare cuts voted by the Ways and Means health subcommittee yesterday totaled $8.8 billion over the fiscal years 1988-90. Under the plan, Medicare payment rates to most hospitals would rise one percent next year. For 1989, they would be increased by the inflation rate minus 3.8 percentage points and in 1990, the inflation rate minus one percentage point.
To adjust for inflation, Medicare's payment scale would rise 2 percent for doctors who agree to accept the Medicare-set figure as full payment in all cases and one percent for those who do not.
Medicare payment scales for doctors for "overpriced procedures" such as hip replacement, cataract and coronary artery surgery and prostatectomies would be cut by 15 percent below 1987 levels.