Congress’ Unhealthy Way to Pay for Medical Care

If you’re wondering why Congress is now considering repealing the catastrophic-insurance bill it passed with such enthusiasm last year, you may not be old enough to understand. I am.

The passage of that bill made me recognize what it’s like to be in a minority--people covered by Medicare--and I haven’t enjoyed it much. Even though I’m told my minority adds up to 1.8 million people in the United States, that becomes a mighty small number when we are asked collectively to pick up the lion’s share of a $5-billion annual tab. Or maybe $10 billion. The numbers seem to change from day to day.

As I write this, a vote is scheduled this week in the House of Representatives either to repeal or viscerally amend the catastrophic-insurance bill. If this isn’t done, it will draw a lot of economic blood from my minority group next April without offering help where it is needed most. Congress passed this bill to expand Medicare coverage in three areas: unlimited days of hospital care, reimbursement for medicinal drugs and a ceiling on out-of-pocket payments to doctors. However, it doesn’t even touch the two most serious economic health problems of elderly Americans: extended home care and nursing homes. As Sen. John McCain (R-Ariz.) wrote in The Times the other day: “What Congress passed last year severely misses the mark.”

It not only misses the mark in coverage but in who is expected to pick up the tab. There are about 33 million Americans covered by Medicare today. About 1.8 million of us are still working productively enough (most of us because--like our younger fellow citizens--we need to work to survive) that the amount we pay in federal income taxes will also require us to make the maximum payment to underwrite catastrophic insurance. That means I would get nicked for $800 over and above my normal taxes next April. (For couples over 65, the tab could reach $1,600.)

This is rather like taxing only veterans to pay veteran benefits or parents to pay for schools. It also means that I will be in a higher tax bracket, percentage-wise, than Donald L. Bren or William Lyon--or Donald Trump. Because I have continued to earn, I not only can’t draw Social Security--into which I have paid for almost 50 years--but I must also pony up, in addition to my income tax, a sizable amount in Social Security tax, plus (unless the law is changed) another $800. (I also happen to have been born within a span of years in which Congress artificially reduced Social Security benefits, but that’s something I’m not even factoring in here.)

I guess the thing that irritates me most about this situation is that as the law is currently written, I have no choice. I can’t turn down the catastrophic insurance. The law requires me to kick in my $800--whether I want the coverage or not.

Seniors are taking a lot of heat these days for living high off the hog while the rest of the nation struggles. I hear this mostly from people in their 30s and 40s and find it enormously irritating. It is the nature of the Social Security system that the contributions of younger people in their high earning years underwrite support for their fellow citizens who have reached retirement age. My generation did it without bellyaching, and the people who are doing the complaining now--much as they would like to deny it--will someday be old themselves and embracing this same support.

This attitude makes retired Superior Court Judge Bruce Sumner furious.

Sumner, who serves on the National Committee to Preserve Social Security and Medicare, said: “We’re being told that because we’re old, we just don’t understand how greedy we’re being. The average Social Security recipient today gets $551 a month, and calling them greedy is an outrage. No one is representing these people. Without us, their voice isn’t being heard.”

None of the members of Congress who are now monkeying around with the catastrophic bill as a result of an avalanche of criticism are looking beyond seniors for financing. Their idea of correcting the inequity for my minority group is to spread the cost among a larger body of seniors who can afford it even less than I can. It hasn’t occurred to them to look to other sources, like closing the income tax loophole that makes it possible for the very rich to pay at a rate considerably below the maximum. This adjustment alone would more than pay for catastrophic insurance.

The irony of a Democratic majority in the House Ways and Means Committee voting to cut capital gains tax rates at the same time it sticks seniors to pick up the whole tab for catastrophic insurance has not been lost on the older generation. It may quite well have the unexpected effect of helping seniors discover that there are now enough of us to deliver up some real political clout. I hope that those members of Congress who are making the rich richer while putting the fork in seniors become aware of that too.