Correction in Medicare Course

Sen. Lloyd Bentsen (D-Tex.) is moving quickly to reduce the tax surcharge covering the expansion of Medicare coverage. That is the right thing to do if, as he argues, an immense surplus is certain. But new doubts have been expressed by both President Bush and Rep. Dan Rostenkowski (D-Ill.), chairman of the House Ways and Means Committee.

All three are resisting pressure to change the basic financing of the new program, and we commend them for that. It will be important, in working out any reductions, to preserve the basic concept of the program that makes it the first element of health insurance for those 65 and older that is self-funded, with seniors bearing costs proportionate to their incomes.

The income-tax surcharge that finances the expanded program applies to about 40% of Medicare beneficiaries. Bentsen now calculates that it can be reduced by at least 16%, becauseprojections now indicate a surplus of as much as $4.2 billion over the next five years. The surplus developed because those who wrote the law underestimated the number of higher income older Americans subject to the surcharge.

President Bush, supported by Rostenkowski, is opposed to any “tinkering” at this time. The disagreements could invite a harsh confrontation. Better, it seems to us, would be an agreement to let the Medicare balance sheet settle the dispute, and to err on the side of going slowly if there are serious doubts.

The refusal of these leaders to yield to pressure to abandon the surtax and to dip into general budget or other tax funds is welcome. Despite all the misunderstandings and controversy, the Medicare extension is a good program and a health insurance bargain even for those paying the maximum surcharge.