Press Release February 2, 1999	Contact: Gail Shearer, sheaga@consumer.org Kathleen McShea, mcshka@consumer.org, Consumers Union's Washington, DC Office 202/462-6262

Consumers Union: Breaux Medicare Proposal A Missed Opportunity

WASHINGTON -- Consumers Union has developed a list of criteria - a Medicare Reform Checklist - that we believe will help identify the strengths and weaknesses of various Medicare proposals, including a recent proposal by Sen. Breaux, D-La.

Consumers scoring Medicare reforms should ask the following questions:

· Does it preserve Medicare as a universal program spreading risks broadly?;

· Does it preserve and expand Medicare benefits so that they do an even better job of meeting beneficiaries' needs, raising revenues fairly across generations (while calling on an increased premium contribution by higher income beneficiaries)?;

· Does it tap the potential of marketplace competition only if such competition can serve consumers' interests (not the profitability of private companies)?;

· Does it create a structure that expands (and does not shrink) the population with access to the Medicare program?;

· Does it begin to create a framework for extending health care coverage beyond Medicare beneficiaries, recognizing that eventual tradeoffs will be needed to locate revenue to fund benefit expansion?

"Senator Breaux has put a very serious proposal for the Medicare program on the table. It transforms Medicare from a program that guarantees a defined set of benefits to a program that provides premium support for beneficiaries to buy health coverage," said Gail Shearer, Health Policy Analysis Director at the DC office of Consumers Union. "However, Consumers Union has very serious concerns about Senator Breaux' proposal. One of the most serious concerns is the increase in the ranks of the uninsured that would result from raising the age of eligibility to 67." Consumers Union's concerns were summarized in a letter to the Bipartisan Commission on the Future of Medicare.

The biggest challenge our health care system faces is making health care affordable - whether you are talking about seniors, children, or people in between, according to Shearer. By allowing HMOs and insurance companies to define the specific benefit package, beneficiaries will no longer have a set of benefits they can count on. This variation in benefits undermines the goals of competition, since consumers could no longer make apples-to-apples comparisons among plans.

Shearer expressed disappointment that the Breaux proposal also misses the opportunity to modernize the Medicare benefits package by providing at least some prescription drug benefits, a start on long-term care coverage, and caps out-of-pocket costs for seniors. The premium support proposal could create more problems than it solves - by increasing the number of uninsured, eroding benefits, and shifting costs from Medicare to its beneficiaries, she added.

"Consumers Union recognizes the need to take steps to preserve Medicare by closing the projected gap between revenues and expenditures. We welcome the President's proposal to devote a portion of future budget surplus funds to this cause," said Shearer.

TO LEARN MORE: For more detailed questions about the Breaux proposal, please dial our faxback line at 202/238-9258 and request documents number 3301 (letter to Breaux), 3302 (Medicare Reform Checklist) and 3303 (Critique of Sen. Breaux's proposal).