Republican congressional leaders are warning President Clinton not to include a shift of at least $55 billion over five years in Medicare home health expenditures from the Hospital Insurance Trust Fund.
Such a transfer could, however, reduce the need to seek greater savings from hospital payments as Congress and the White House seek to extend the life of the trust fund, which is expected to be exhausted by 2001.
Senate Majority Leader Trent Lott (R-Miss.) last week warned against any "monkey business" in transferring some home health funding from Part A, which relies solely on Medicare payroll taxes, to the Part B fund, which draws largely from general federal tax revenues. Republicans consider the plan a budgetary trick that doesn't address the long-term solvency of the Part A trust fund.
Clinton included such a transfer in past balanced-budget proposals. Administration officials and other sources said the president plans to include it in his budget proposal for federal fiscal 1998.
The estimated $55 billion to $70 billion that such a shift would save the Part A trust fund could constitute more than half the savings Congress and the administration will try to achieve from Medicare during the next five years. That could reduce the pressure to put new limits on the growth of hospital payments.
"To the degree that you're able to extend the life of the trust fund without making direct draconian cuts to hospital payments, we think it's a great idea," said Richard Pollack, the American Hospital Association's executive vice president for federal relations.
Republicans have urged Clinton repeatedly to deliver a budget document they can seriously consider.
Eric Sokol, assistant director of government affairs with the National Association for Home Care, said the home health spending shift will be a "litmus test" of how serious Republicans take Clinton's budget proposal. He said Republicans are more likely to treat Clinton's proposal skeptically if the shift is included.
Sokol said home health providers object to such a shift because they believe it would expose Medicare beneficiaries to greater cost sharing under Medicare Part B.
The Congressional Budget Office estimates Medicare will spend $134 billion on home health services between 1998 and 2002, the period over which Clinton and Congress hope to balance the budget.