STILL WAITING FOR THAT SEVENTH VEIL

By DAVID VAN BIEMA

It was supposed to be the week of the fine print. after months of hinting that his Republicans knew just how to cut $270 billion out of Medicare by 2002 while simultaneously widening its possibilities--and swearing that only the details needed polishing--Newt Gingrich finally unveiled the Medicare Preservation Act last Thursday. The proposal and its Senate counterpart, introduced Friday, were indeed abulge with details. But the most important one--how they would reach the savings goal--was missing. Highlights:

Both proposals would seek big savings by increasing what Medicare recipients pay for coverage. For most, the current monthly premium of $46.10 for doctors' bills would rise to $90 or more by 2002. Those with annual incomes of more than $100,000, however, would pay $286 a month by that year. The Senate plan would also add $50 to the current $100 deductible now applied to everyone.

The Republicans would also try to save money by changing dozens of formulas to reduce the amounts paid out to hospitals, doctors, nursing homes and labs. Especially hard hit would be institutions with large numbers of low-income patients, whose bonus for taking them in would be cut 25%.

To balance out that blow a bit for health-care providers, both the House and Senate plans offer doctors a bouquet of new benefits. They reduce the punitive and pain-and-suffering parts of malpractice awards to a maximum of $250,000. They allow doctors and hospitals to form their own health-care plans, called provider-sponsored networks, so they can compete with existing HMOS and insurance companies. And both proposals revive some currently banned self-referrals, which means, for example, that an orthopedist with an investment in a radiology lab would once again be allowed to send his Medicare patients there for X rays.

While hitting the elderly in the pocketbook, the Republicans hope to offer them a greater choice of medical plans, beyond traditional fee-for-service care and HMOS. Patients could direct government payments to provider-sponsored networks; or to plans created by large organizations like the AFL-CIO for their members; or to private insurance plans. In fact, if patients were to buy low-cost insurance that offered only catastrophic protection, the Republicans would allow them to bank the difference between their insurance premium and the average Medicare payment.

But for all the new plans' ambition, the absence of hard numbers continues to loom over Republicans like a giant, baleful asterisk. Democrats maintain that when the Congressional Budget Office adds the figures in, they will fall far short of the magic, budget-balancing $270 billion. Critics are especially scornful of Gingrich's claim that $70 billion would be generated merely from seniors voluntarily joining HMOS.

There is an escape hatch in the House proposal: a fail-safe provision stipulating that if annual expenses exceed the budget, the Secretary of Health and Human Services would be required to get the money out of the fees paid to doctors and hospitals. That is fine if the difference is small. But if it runs into the tens of billions, this week's effort to fill in the blanks will seem pointless.

--Reported by John F. Dickerson/Washington

With reporting by John F. Dickerson/Washington