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STARK/GRADISON/WAXMAN CATASTROPHIC PLAN WOULD KEEP OUTPATIENT DRUG PROGRAM, JETTISON HOSPITAL/PHYSICIAN COVERAGE: AARP SUPPORTS PROPOSAL

Executive Summary

Reps. Stark (D-Calif.) and Waxman (D-Calif.) are pushing a catastrophic care modification proposal that would retain the act's prescription drug benefit but eliminate Parts A and B catastrophic coverage and the supplemental premium, according to a proposal summary released by Stark's staff. The proposal also has the key support of Republican Rep. Gradison (Ohio). The proposal will be considered as a floor amendment to the budget reconciliation package. The House began debate on the overall budget package on Sept. 27; the catastrophic care amendments are expected to be taken up the week of Oct. 2. The proposal created by the two California Democrats will be offered as an alternative to both the Ways and Means Committee's catastrophic care modification plan already included in the budget bill and a repeal amendment to be offered by Rep. Donnelly (D-Mass.). The House Rules Committee gave permission for Stark and Waxman to offer the amendment on Sept. 26. The two legislators drafted a new approach to dealing with the impasse over Medicare Catastrophic Coverage when it became clear that the Ways & Means plan does not have sufficient support to hold off a repeal of the law. House Speaker Foley (D-Wash.) has said he will support the Stark/Waxman proposal over Donnelly's amendment. The proposal has also received backing from several senior citizen groups, including the American Association of Retired Persons and the National Council on Senior Citizens. AARP Executive Director Horace Deets urged further Congressional support for the amendment in a Sept. 29 letter to members of the House. He maintained that the benefits retained by the proposal are "unavailable or unaffordable to most beneficiaries through the private sector, or if so only at considerable cost." Deets also points out that the proposal removes the most "objectionable aspect" of the catastrophic act from the seniors' point of view -- the supplemental premium. If both Donnelly's and the Stark/Waxman proposals are approved on the House floor, the Stark/Waxman proposal would take precedence over the Donnelly amendment under the rule approved by the Rules Committee. The Rules Committee also allowed an amendment by Rep. Pannetta (D-Calif.) that addresses the budgetary impact of changes to the Medicare Catastrophic Coverage law. Both the Stark/Waxman and Donnelly amendments contain provisions that would exempt the deficit caused by the late-hour revision in Catastrophic Coverage from Gramm-Rudman-Hollings requirements. Pannetta's amendment would strike the exemptions. The Stark/Waxman proposal follows the same plan for the modifying the drug benefit as the Ways & Means plan: keep the coverage intact but raise the deductible from the current $ 600 level to $ 800 in 1991, and from $ 652 to $ 950 in 1992. The Stark/Waxman proposal also would retain benefit expansions for home health care, respite care, hospice care, and screening mammography that are included in the Medicare catastrophic care law. However, the law's protection against catastrophic expenses for hospital and physician care would be removed. The program would be remain mandatory for Medicare beneficiaries. The Ways & Means plan keeps all benefits intact but makes them voluntary by tying them to Part B coverage. Some House staffers have suggested that one advantage of the Stark/Waxman approach is that Congress in future years may be more willing to extend hospital and physician care, than to add new benefits such as prescription drug coverage. Removing the hospital and physician expansions would give Congress more time to develop a financing plan.
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