Statement of Administration Policy: H.R. 3436 - Older Americans Act Technical Amendments

(House Rules)
(Pepper (D) Florida)

The administration opposes H.R. 3436. Although its title indicates that this bill simply contains technical amendments to the Older Americans Act, in fact it also includes the text of H.R. 2762, the "Medicare Long-Term Home Care Catastrophic Protection Act of 1987." If this bill were to reach the President's desk, his senior advisers would recommend its disapproval.

H.R. 3436 would initiate a series of major, unprecedented changes for Medicare. These changes would dramatically expand Medicare coverage, eligibility, costs, and taxes.

The main provisions of H.R. 3436 would:

• Eliminate the maximum wage on which contributions for Medicare payroll taxes are paid, subjecting many taxpayers to steep tax increases and severing the traditional relationship between Medicare's Hospital Insurance (HI) and the social security wage base.
• Expand Medicare beyond covering acute medical care to paying for long-term care, support, and social services.
• Dramatically increase Medicare costs by allowing currently ineligible disabled individuals to purchase HI coverage at heavily subsidized rates.
• Dramatically increase Medicare costs by making currently ineligible children eligible for benefits upon determination by a physician that a child is impaired. This provision would generally shift costs from States to the Federal Medicare program.

By adding $1 billion to the 1988 Federal deficit, H.R. 3436 would violate the Balanced Budget and Emergency Deficit Contol Act of 1987. Before the House considers a major new policy depature like H.R. 3436, thorough Congressional hearings and a full actuarial analysis of its implications for the Medicare trust funds need to be completed. Consideration of H.R. 3436 is premature since it has not had any Committee hearings or other consideration.