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Reforming Medicare
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January 15, 1997: 8:16 p.m. ET
Clinton expected to propose $100B in savings over five years
From Correspondent Kelli Arena
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WASHINGTON (CNNfn) - President Clinton won't formally unveils his fiscal 1998 budget plan for three more weeks, but sources say the proposal will include calls for $100 billion of Medicare savings over five years.
Medicare provides health insurance to elderly Americans, but will run out of money in the next few years unless the government modifies the popular program.
Yet Republicans are still smarting from what they term "Medi-Scare," the Democrats' pre-election effort to convince senior citizens that the GOP wanted to destroy Medicare.
"The 'Medi-Scare' campaign worked," said Martha Philips of the Concord Coalition, nonpartisan group that advocates government fiscal responsibility.
Philips said the Democrats' campaign "frightened an awful lot of seniors who are afraid of things they needn't be afraid of. It also foreclosed a lot of options politically."
As a result, experts don't expect a lot of progress on Medicare this year.
Robert Reischauer of the Brookings Institution think tank said that while Clinton's expected $100 billion savings plan would help, it's only a drop in the bucket. (157K WAV) or (157K AIFF)
The health-care industry is closely watching the looming battle, amid reports that the administration might recommend such things as lower payouts to health-maintenance organizations.
Health-care providers warn that smaller payments will eliminate extra benefits, reduce options for senior citizens and increase out-of-pocket costs.
David Jones, chairman of managed-care provider Humana Inc., said the administration has advised the industry that any Clinton proposal will include "some combination of higher premiums and lower benefits."
But he added that the White House has said the plan "would be a first offer, and not be the final solution."
Experts say the real test will involve whether Clinton's proposal contains the seeds of real structural reform.
If it does, Washington watchers say the plan would represent a politically brave move at a time when many politicians would rather take cover.
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