December 18, 1974
Page 40810
FORD INFLATION PLAN – A DOUBLE BLOW FOR ELDERLY
Mr. MUSKIE. Mr. President, the Ford administration's recent proposed cutbacks in medicare and food stamps would deal a harsh blow to the elderly and disabled.
It is ironic, indeed, that the administration is asking persons who are hardest hit by inflation to make some of the greatest sacrifices.
Surely there are more humane and sensible ways to pare our budget than to saddle aged and handicapped Americans with new medical and food costs.
Of all the possible alternatives for reducing Federal spending, the administration could not have chosen a more inappropriate target than medicare protection for older Americans.
What it represents is a resurrection of a discredited Nixon administration proposal to raise health care costs for the elderly.
It was rejected then in 1973, and it should be rejected now.
In brief, the administration proposal would add a new coinsurance payment for medicare patients who are hospitalized. This would be equal to 10 percent of charges above the hospitalization deductible – now $84 but to rise to $92 this January.
Under present law the medicare beneficiary pays the first $84 of his hospital bill, and nothing thereafter until the 61st day.
For the overwhelming majority of the 5.6 million medicare patients who are expected to be hospitalized in 1975, this proposal could greatly increase their hospital costs.
Second, the administration proposed to increase the annual deductible for physician services under medicare from $60 to $67. Then the deductible would rise proportionately with social security percentage increases.
These measures represent a serious retreat in coverage under medicare. They would dramatically affect the overall security of older and disabled Americans.
All in all, the reaction to the administration's recommendations has been overwhelmingly in opposition.
In fact, the Federal Council on Aging has sent a letter to the President, expressing their concern. They also asked the administration to provide the Council with advance notice of any proposed legislation affecting older Americans.
Mr. President, yesterday's Washington Star-News includes an excellent Associated Press article which describes the impact of the administration's proposals for the aged.
It merits the attention of every Member in the Senate.
For this reason, I ask unanimous consent that the article entitled "Ford Inflation Plan – a Double Blow for Elderly" be printed in the RECORD.
I also ask unanimous consent to have the Federal Council on Aging's message to President Ford printed in the RECORD.
There being no objection, the material was ordered to be printed in the RECORD, as follows:
[From the Washington Star-News, Dec. 17, 1974]
FORD INFLATION PLAN – A DOUBLE BLOW FOR ELDERLY
(By John Stowell)
Millions of elderly Americans on fixed incomes would be dealt a double blow in their health and food budgets if Congress accedes to President Ford's inflation-fighting proposals on Medicare and food stamps.
The average retired worker receiving a $187.11 monthly Social Security check now pays $92 for up to 60 days of hospitalization. But under the President's proposed amendments to Medicare, this retiree would have to pay $250 out of his own pocket if hospitalized 10 days, $600 for 40 days and $750 for 60 days.
The same person would become ineligible for federal food stamps March 1, as the Agriculture Department hurries to comply with a presidential directive. He now pays $38 to receive $46 worth of food stamps each month.
Ford proposed a $4.6 billion reduction in federal spending this fiscal year. Some of this Nov. 26 proposal has drawn fire from influential legislators, nutrition groups, the presidentially appointed Federal Council on Aging and the American Hospital Assn.
As part of the proposed budget cuts, the administration estimated a net $425 million saving in the Medicare program for the remainder of this fiscal year if the elderly were charged more for their health care, and a $215 million saving in the food stamp program between March 1 and June 30.
The higher cost for food stamps, with a partial year savings of $215 million, is considered assured because the Agriculture Department can place it into effect without congressional approval.
The USDA has offered a shortened comment time ending Dec. 27 for objectors. The plan will boost the cost of food stamps most sharply for single recipients and couples, eliminating singles with monthly incomes between $172 and $194.
About 23.5 million persons receive automatic Medicare benefits. These persons pay $92 when hospitalized to cover the first 60 days in the hospital. They may also pay $80 a year for optional supplemental medical coverage.
Under Ford's proposal, Medicare beneficiaries would be charged 10 percent for all bills above the present $92 deductible up to a $750 maximum "per spell or illness" and $67 annually for physician's care.
Out-of-pocket outlays for both Medicare programs would be tied directly to increases in Social Security benefits.
"The chief drawback in the present arrangement is that the beneficiary's costsharing burden occurs at the end of a long, institutional stay when the beneficiary is least able to afford it," HEW said in arguing for Ford's proposed change. Under the existing program, the flat $92 coverage ends on the 60th day of hospitalization and increases to $23 daily until the 90th day when the patient becomes obligated for all future hospital charges.
However, he can draw on a once-only reserve of 60 days but must pay $46 daily for that privilege.
Without using the reserve, a Medicare patient now pays $782 for 90 days in a hospital, $2,392 for 125 days and $3,542 for 150 days.
HEW argues that Ford's proposal would not cause such a financial burden at the end of a long hospital stay because of the $750 ceiling.
Under the proposal, the patient would pay $750 for 60 or more days in a hospital during a "benefit period." A new benefit period wouldn't begin until he had been out of the hospital for two months.
However, Social Security records show that of about 6 million Medicare patients who will seek hospital care this fiscal year, 97 percent will be hospitalized for less than 60 days.
Only 2 percent – or 100,000 beneficiaries – would be hospitalized between 60 and 90 days, and less than 1 percent – or 35,000 – between 90 and 150 days, the length of stay needed for the Ford proposal to benefit them financially.
While the administration projects a half-year saving of $465 million with higher Medicare charges, about $40 million of that would be eaten up by increased Medicaid outlays to aid elderly persons who would become medically needy for the first time.
DECEMBER 9, 1974.
MESSAGE TO PRESIDENT FORD
MY DEAR MR. PRESIDENT: The Federal Council on Aging wishes to convey to you its deep concern about the financial burden that would fall on the elderly as a result of the reductions you have proposed in the 1975 budget. In particular, we cite the additional costs that would have to be borne by the aged in relation to such programs as Medicare, Medicaid and food stamps.
As a body established by the Congress to advise the President on the needs of older Americans, we would have liked the opportunity of expressing our views on this matter of such great consequence to the elderly, before it left the White House.
In the future, we would hope that the Administration might utilize the Federal Council on Aging for advice and consultation when matters of such great impact on the lives of older Americans are still in their formative stages.
Sincerely,
BERTHA S. ADKINS,
Chairman, Federal Council on Aging.