No New Medicare Bureaucracy

Notwithstanding President Clinton's strongest statement yet in support of charging higher Medicare premiums to the wealthy, it was not clear today whether the administration's latest proposal on who should collect the premiums would fly with congressional Republicans.

Clinton said the White House had offered the Senate a new proposal that would "allow Treasury to collect the money but have it go directly to the Medicare trust fund, so that there's no question of a tax payment." Added Clinton, "And we think that would ease a lot of the Republican, and, frankly, some of the Democratic concerns that it [not] look like a tax increase."

In reiterating his support for means testing of Medicare premiums Clinton promised, "I would be happy to defend the vote of any member of Congress, Democrat or Republican, who votes for this."

A White House official later added that the administration's proposal "would not implement the premium adjustment through the income tax form." A one-page White House summary of the plan says those required to pay the increased premiums would fill out a separate "Medicare Premium Adjustment" form and write a separate check to the Medicare Trust Fund -- but both the form and payment would be filed along with their income taxes and due April 15.

Clinton repeated his view that HHS should not collect the premiums, saying that would cost $12 billion more over a 10-year period than if the IRS did it and create "a whole new bureaucracy" at HHS.

House Ways and Means Chairman Archer, who said Monday that "if the IRS does any part of it, it's a poison pill," today said Clinton's compromise proposal "may be a movement in the right direction," although he said, "We're going to have to look at it."

Senate Finance Chairman Roth said Clinton "made some interesting proposals" that are "worthy of very careful consideration."

But Sen. John Chafee, R-R.I., one of the leaders of a centrist group of senators who favors making wealthy Medicare recipients pay more for their benefits, said the proposal could create a delay of two to three years in transferring the information between agencies.

Other stumbling blocks remain on means testing, the White House official noted. He said the administration was still working with Congress on resolving whether the wealthier Medicare recipients should pay 100 percent of the premiums, as Senate negotiators want, or only 75 percent, as the White House wants.

Also on the table is the White House insistence that the salaries of the wealthier recipients be indexed so inflation does not bump retirees making less money into the higher brackets. The official said Senate Democrats had agreed to indexing, but that the White House is "still working with Republican senators" to reach an agreement on the issue.