Medicare Will Become Bankrupt Sooner than Officials ExpectedBy Spencer Rich
The Washington Post
Medicare's Hospital Insurance Trust Fund appears to be headed for insolvency sooner than expected, according to a news report that appeared Monday.
The report, published in the New York Times and based on Treasury documents released Oct. 27, provided new fuel for Republicans in their battle with President Clinton over how much to cut the growth of Medicare.
The news report said that instead of increasing by $4.7 billion in fiscal year 1995 and continuing to rise for another year as the administration had predicted, Medicare's trust fund had actually declined by $35.7 million for the fiscal year ending Oct. 1.
This decline suggests that the trust fund's reserves are sliding downward faster than expected and the trust fund might go bankrupt before 2002, the currently predicted insolvency date.
Medicare officials were not available to discuss the numbers Monday or say whether the 2002 insolvency date might change.
Medicare chief actuary Richard S. Foster called the change a "relatively small decline" in the fund's total assets which amounted to $129 billion at the end of 1994. He said it was possible the decline might alter the 2002 date "somewhat" and also possible that "the current projection of depletion in 2002 will stand."
House Republicans Monday demanded to know whether the Clinton administration had withheld news of the decline in the trust fund in order to avoid giving the GOP ammunition to justify larger Medicare cuts than Clinton wants. The president has accused Republicans of proposing to cut Medicare more harshly than needed in order to offset their proposed tax cut.
The original GOP bill called for $270 billion in cuts in the program's growth over seven years compared to Clinton's $124 billion. Republicans have now lowered their target to $168 billion, according to Rep. Bill Thomas, (R-Calif.), chairman of the House Ways and Means subcommittee on Medicare.
"We are very concerned that officials of the administration involved in the negotiations over the legislation passed by the Congress to save Medicare may have known about the early deficit spending during those negotiations and chose to withhold that information from the public," Thomas told reporters at a news conference that was held Monday.