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Week: 579.6 Part 1

Guests: Rep. Bill Thomas (R-CA), Rep. Pete Stark (D-CA), Adrienne Mitchum, Consumer's Union

 Topic: Medicare Medical Savings Accounts

 Reporter: Aaron Cohen

 Host/Producer: Steve Girard

NEMA: Thanks for joining us today...the first day of a new feature for The Heart of the Matter...it's called "Health on the Hill" and features items on handling health issues as only Capitol Hill can...with a fellow journalist I've known for about 14 years now...Aaron Cohen...who's done a dozen years covering the Washington beat. Making its way through Congress is a plan recently unveiled by Republicans to stave off the bankruptcy of the Medicare Health plan for the indigent and the elderly. As Aaron Cohen reports, it's not as controversial this time, but there are roadblocks to overhauling the system....

COHEN: Do you remember the last time Congressional Republicans tried to save Medicare? It was 1995, and the GOP plan came under a withering Democratic assault, resulting in the shutdown of almost the entire federal government. Well, don't expect as much fireworks this time around, but another proposal to allow medical savings accounts as an alternative to Medicare is still a centerpiece of the Republican-led effort...just toned down. Basically, a medical savings account is a hybrid insurance plan and tax shelter that operates under the premise outlined here by the man who will shepherd it through the House...California Republican Bill Thomas... 

THOMAS: ...that people will consume as much health care as other people are willing to pay for. And that what you have to start doing is making difficult decisions, and take into consideration the interest of those people who are paying.

COHEN: Thomas, Chairman of the key Ways and Means Subcommittee on Health, is on the same page as President Clinton in one respect - saving 115 billion dollars spending by cutting back on payments to doctors, hospitals and other health care providers. Thomas proposed a medical savings account demonstration project, because the nationwide program proposed two years ago became a flash point in the budget wars. This time, President Clinton is said to be favorably disposed to an MSA experiment, but spokesman Mike McCurry said Clinton told Congressman Thomas he has very real concerns....the California Republican would allow a half million people to buy into the MSA option, first purchasing a high deductible insurance policy to cover catastrophic illnesses, such as strokes and heart attack. MSA contributors would put the rest of the money into rainy day accounts to cover minor illnesses, simply rolling over unused money into the next year...

While acknowledging some disagreements about MSA's, Thomas' counterpart on the health subcommittee sounds conciliatory...California Democrat Pete Stark...

STARK: That may be the genesis of a compromise that will get us through one of the thornier issues, and get us on our way....

COHEN: May is truly the operative word, because consumer organizations, labor unions and some religious groups are steadfastly opposed to medical savings accounts. In a letter to key Congressional leaders, they say the nature of Medicare would be transformed from a universal medical program to one that cares for the healthy and wealthy, leaving the sick and poor behind. The Consumers' Union, publisher of Consumer Reports, is leading the opposition...here's their Adrienne Mitchum....

MITCHUM: Well, we already have a demonstration under operation, and that's for the under 65...that was included in a part of the Katzenbaum-Kennedy bill that passed in the 104th Congress...and we're still waiting for those results. Seniors are an extremely vulnerable population, and we don't think that we should really be using them as experiment rats, until we get the results back.

COHEN: Mitchum, with the consumers' Union, makes the point that medical savings accounts are untried and untested...and allowing 500 thousand people to opt into a demonstration to save the Medicare program, would be far too risky. But with Medicare destined for bankruptcy, Congressional Republicans seem willing to take that risk.

For "Health on the Hill", I'm Aaron Cohen.

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