The latest doom-and-gloom report on the federal Medicare trust fund will renew pressure on Washington lawmakers to implement major Medicare payment reforms, provider groups say.
"The more news on the trust fund, the more they're going to want to do something on Medicare quickly next year," said Thomas Scully, president and chief executive officer of the Federation of American Health Systems. "We're going to be right back in this next year."
The report, released last week by the Congressional Budget Office, said provider payments will exhaust the Medicare Hospital Insurance Trust Fund in 2001, a year earlier than the Medicare trustees projected last year.
The report's release set off a fresh round of election-year finger-pointing.
Congressional Republicans blamed President Clinton for vetoing their Medicare reform plan, which was contained in balanced-budget legislation last year, and called on him to draft a new Medicare-reform plan.
"The president must heed this new warning about Medicare," said Rep. William Thomas (R-Calif.), chairman of the House Ways and Means health subcommittee. "What I'm hopeful of is that when the president offers his 1996 (Medicare trustees) report, he will not offer the same old solutions."
The White House, meanwhile, dismissed the figures as "a snapshot" that may not prove to be a trend and charged that Republicans were trying to scare senior citizens.
The CBO's report is a revision of previous estimates. In March 1995, the CBO projected that Medicare Part A spending would increase from $114 billion in fiscal 1995-with income exceeding payments by $3 billion-to $247 billion in fiscal 2005.
In fact, the CBO now estimates fiscal 1995 spending of $115 billion because of greater-than-expected hospital admissions and a change in the case mix.
Medicare payroll taxes, meanwhile, were $2 billion less than expected, meaning the trust fund was roughly in balance.
Because of those greater-than-expected expenditures in 1995, the CBO now projects Medicare Part A payments will accelerate to $255 billion in fiscal 2005 and $275 billion in 2006. Medicare Part A spending will exceed income by $112 billion in 2006, and cumulative deficit spending will total $444 billion by 2006.
Provider group lobbyists said the new CBO report could increase pressure on Congress to pass a limited Medicare bill before it adjourns for the November election.