The hospital industry watched anxiously last week as everyone from Congress to the Bush administration played with hospitals' nest egg. And hospitals didn't like it.
Hospital groups last week joined Democrats in opposing President Bush's proposal to roll Medicare surpluses into a federal contingency fund that could be used for other purposes.
Seven hospital groups, including the American Hospital Association, the Federation of American Hospitals, the Catholic Health Association and the VHA hospital alliance, signed a letter sent to lawmakers late last week opposing the proposal to include Medicare Hospital Insurance Trust Fund money in a contingency fund planned by the Bush administration. The groups also oppose the use of the trust fund to pay for a prescription-drug benefit.
HHS Secretary Tommy Thompson told the House Ways and Means Committee that funds in the trust fund would be used to pay only for Part A services. But the administration did not appear to be backing off from its proposal, contained in Bush's budget blueprint, to account for a cumulative $526 billion surplus in the trust fund over 10 years as part of an $842 billion contingency fund that could be used for other purposes.
"If (the revenue) is missing, there will be fewer Medicare dollars available for Part A services," said the Rev. Michael Place, chief executive officer of the CHA. "But the people who come to the hospital will still be as sick. We still will be there to provide care."
Edward Goodman, VHA's vice president of public policy, said, "We would support walling off the Medicare trust fund. It's important to have sustainable funds, and that's what walling-off would do."
In his testimony before the Ways and Means Committee, Thompson said Medicare might be able to draw from money in other programs in the contingency fund to pay for prescription-drug coverage for seniors if that benefit turns out to be more expensive than the $153 billion earmarked in Bush's budget to pay for the program.
But that argument didn't stop congressional Democrats and liberal interest groups from attacking the Bush plan as a killer of federal social programs, including Medicare. The consumers group Families USA released a report saying that the president's plan would speed Medicare's insolvency by 15 years, to 2010.
"That is not the way to protect Medicare," said Senate Minority Leader Thomas Daschle (D-S.D.), speaking to reporters outside the Senate chamber.
Senate Democrats tried to pass a measure placing the Part A trust fund dollars in a "lockbox." Republicans responded with their own version of the legislation. However, both failed to get the necessary 60-vote majority for passage.
The attack on the Bush plan comes as the Treasury Department is preparing to release the yearly report of the Medicare trustees, which projects how long it will be before the Part A trust fund runs out of money. Last year's report put it at 25 years.