The annual report on the health of the Medicare Part A trust fund was released last week to unprecedented interest, but provider groups said the pessimistic projections probably won't lead to any significant reforms this year.
The Medicare Hospital Insurance Trust Fund, which pays Medicare Part A reimbursements to providers, will be insolvent early in 2001, a year earlier than projected last year, according to the report issued by the fund's trustees.
Using a less optimistic set of assumptions, the fund could be bankrupt as early as 2000, the trustees added.
Fiscal 1995 was the first year the fund took in less than it spent, decreasing the fund balance by about $36 million. In fiscal 1996, the fund will decrease by more than $8 billion, the trustees project.
The release of the report was marked by intense national interest and fierce partisan sniping as Republicans and Democrats accused each other of demagoguery (See related story, p. 27).
Vice President Al Gore said the latest Republican budget proposal, which would reduce projected Medicare spending by $168 billion over six years, was a "warmed-over version of a plan that would make Medicare wither on the vine. They are now tying themselves in knots trying to explain to the American people" how their plan does not result in actual reductions in spending.
"If the effect of a plan is to lay off nurses, it is a cut," Gore added. "If the effect of a plan is to close hospitals, it is a cut. This is Sen. (Bob) Dole's last week in the Senate. He should not spend it closing hospitals."
Republicans blasted back at the White House for vetoing last years' GOP budget plan that Republicans say would have extended the life of the trust fund by about 10 years.
"For the president to miss this opportunity to step forward and lead is simply a repetition of the last year of playing politics with Medicare," said Rep. William Thomas (R-Calif.), chairman of the Ways and Means Committee health subcommittee.
Provider groups said last week they saw little hope that in an election year lawmakers would enact Medicare reform legislation.
"I am still going under the assumption that it is going to be difficult to find a solution in this environment," said Richard Pollack, executive vice president of the American Hospital Association.
The AHA took the occasion of the report's release to renew its call for an independent Medicare commission. Under the plan, Congress would set a budget each year for Medicare that would go to the commission. The panel would come up with a blueprint for spending that money. The commission's budget would then go back to lawmakers for approval or rejection-they could not amend the package. AHA officials contend the proposal would take Medicare spending decisions outside the realm of politics.
The AHA also began an ad campaign last week aimed at Washington lawmakers calling on them to support the commission plan.
Both Dole, the Senate majority leader and presumptive Republican presidential nominee, and HHS Secretary Donna Shalala called for the formation of a commission of a different type. Each said they supported a one-time commission that would report on long-term solutions to the trust fund problem, similar to the independent commission that recommended a rescue plan for the Social Security fund in the early 1980s.