March 19, 1999
Medicare Commission Fails to Approve Proposal in Final Meeting
The Bipartisan Commission on the Future of Medicare met for the last time March 16 and voted on a premium-based Medicare reform plan that includes changes to the way graduate medical education (GME) is financed. The plan, offered by Sen. John Breaux (D-La.) and Rep. Bill Thomas (R-Calif.), received 10 of the 11 super-majority votes (out of 17) needed for the commission to make recommendations to President Clinton and the Congress. The commission will now disband and the Breaux-Thomas document will not be reported to the Congress and President Clinton. However, Sen. Breaux and Rep. Thomas have indicated that legislation based on the commission proposal will be drafted and introduced shortly.
The meeting began with Sen. Breaux offering opening remarks before Rep. Thomas presented the final proposal to the commission. Each commissioner then had an opportunity to make a statement before the commission voted on the proposal. Several amendments were prepared by Reps. John Dingell (D-Mich.) and Jim McDermott (D-Wash.) in case the plan received the supermajority vote. Commissioners Stuart Altman, Laura D'Andrea Tyson, Bruce Vladeck, Tony Watson, Rep. Dingell, Rep. McDermott and Sen. John Rockefeller (D-W.Va.) voted against the proposal, citing various reasons: opposition to a "voucher-based" model; inadequacy of the proposal's prescription drug financing, the proposal's impact on beneficiaries; and the failure to include President Clinton's proposal to inject 15 percent of the surplus into Medicare.
The premium-based comprehensive reform proposal includes important changes to the financing of special payments to teaching hospitals. According to the Breaux-Thomas proposal, "all non-insurance functions and special payments now in Medicare would not be included in calculations of premiums for the government-run FFS plan or private plans." In addition, the plan states,
"Congress should examine all non-insurance functions, special payments and subsidies to determine whether they should be funded through the Trust fund [newly combined A and B Medicare trust fund] or from another source." (p. 4)
"Payments for Direct Medical Education (DME) would be financed and distributed independent of a Medicare premium support system. Since the Part A and Part B trust funds would be combined and the traditionally separate funding sources of payroll taxes and general revenues would be blurred, Congress should provide a separate mechanism for continued funding through either a mandatory entitlement or multi-year discretionary appropriation program." (p. 4)
"On the other hand, Indirect Medical Education (IME) presents a unique problem since it is difficult to identify the actual statistical difference in costs between teaching and non-teaching hospitals. Therefore, for now Congress should continue to fund IME from the Trust Fund as an adjustment to hospital payments premium-based comprehensive reform proposal includes important changes to the financing of GME." (pp. 4-5)
The Breaux-Thomas proposal does not specifically mention DSH; however, the accompanying cost estimate document suggests funding DSH and IME outside of the Medicare program.
In a press conference held prior to the Medicare Commission's meeting, the president announced that he will introduce his own Medicare reform proposal shortly in light of the commission's failure to get 11 votes.
Information: Richard M. Knapp, Ph.D. 202-828-0410 or Lynne L. Davis 202-828-0526.
