MEDICARE'S FUGURE: CUT WASTE FIRST

May 1995 has gone into history as a very unhappy month for the tens of millions of seniors in this country. Both houses of Congress voted to slash huge sums from future expenditures on Medicare and also to downgrade the cost-of-living raises on Social Security so we'll get less money as inflation rises. Only strong resistance from all of us can possibly weaken the terrible impact of this heavy blow when the final budget bill becomes law.

The basic need is to analyze what has happened, understand the causes and then craft a strategy that meets our needs as best we can. What has to be understood is that the number of senior citizens eligible for Medicare is going to rise very sharply in the years immediately ahead. And what Congress has voted to do is to restrict the increase in Medicare spending well below the increase in Medicare-eligible citizens, so that on average each one of us in the future will have less Medicare money available to meet our needs.

This isn't a mindless Republican cut to finance tax cuts for the rich as the Democrats try to mislead us into thinking. Last year when President Clinton's supposed health reform bill was on the table, it provided for very similar huge cuts in future Medicare expenditures, so any blame to be apportioned can go very properly to both parties, to Bill Clinton as well as Newt Gingrich.

The basic problem is that we have a huge national debt. Our federal budgets have been in deficit for many years. The opinion is growing abroad that the dollar will soon become funny money, as anybody can see who looks at how dismayingly low the dollar has fallen in terms of the Japanese yen and the German mark. There is a real problem here, and the effort to balance the budget is a serious need.

But there are an awful lot of unnecessary and expensive programs in the federal budget, and they, rather than Medicare, should be the primary targets of the budget cutters. Take that silly space station they're spending billions of dollars to build. Who needs it outside of the big companies making profits on its construction? In my opinion nobody needs it, and it could be scratched with no injury to the national interest, saving billions of dollars.

Then there's that enormous and lunatic agricultural program in the federal budget. It still spends about $10 billion a year to pay farmers for not growing food. That started in the depression of the 1930s when farm prices were terribly low. It makes no sense in the l990s, so that program should be abolished. But the farmers who have gotten into the habit of feeding at the federal trough don't want to give up this luxurious subsidy.

And so it goes with unnecessary program after unnecessary program. The time has come to demand that Congress get rid of all the pork in the budget before it shaves one penny from the essential Medicare budget.

Unfortunately the Medicare budget is so big that it will have to be cut some even if the pork in the rest of the budget is eliminated. There are an awful lot of us senior citizens, and many of us need lots of medical care each year.

Some ways the government shouldn't go are clear. They shouldn't herd us into HMOs, because many of them give poor care and the data show clearly they don't save much, if any, money over the fee for services system most of us enjoy. I like the freedom to go to any doctor I want, and so do most other seniors.

The government has already cut severely the payments to hospitals and doctors who treat us, and the result is that many doctors and hospitals don't want us. They lose money on us, and if there are further cuts we'll be even less welcome, and our care will deteriorate further.

A major fact is that three-quarters of us had annual incomes in 1993 of less than $25,000. We're not the wealthy playboys the media paints us as being.

The best solution, I think, is to make Medicare a catastrophic insurance program. The great majority of us can afford normal medical expenses during a year, say $1,000 or $2,000. But beyond such a figure an illness becomes a medical and economic catastrophe. It is that kind of catastrophe against which Medicare should protect us, instead of wasting money on small bills we can pay ourselves.

Harry Schwartz is a former member of the New York Times editorial board.