Medicare Part A Trust Fund Has An Extra Year To Live

Medicare's Hospital Insurance Trust Fund will be exhausted in 2019, one year later than estimated last year, according to the Medicare Trustees Report issued April 23. But despite the improvement, the trustees still issued a "Medicare funding warning" that requires President Bush to propose program cuts in February 2008 for the 2009 budget year.

"This report shows once again that we are on an unsustainable course for Medicare spending," Health and Human Services Secretary Mike Leavitt says in a release. "If Congress were to embrace the President's budget, we could not only eliminate this funding warning, we could also extend the life of the Hospital Insurance Trust Fund four years."

The President's 2008 budget includes freezes for home health agencies, hospices and durable medical equipment suppliers.

But Democrats are quick to dismiss the funding warning. "I am concerned … that the 'Medicare funding warning' in this report will prompt the president only to propose slashing Medicare spending, rather than to focus on the underlying factors driving costs throughout the health system," Senate Finance Committee Chair Max Baucus (D-MT) told Congressional Quarterly.

House Ways and Means Health Care Subcommittee Chair Pete Stark (D-CA) was more blunt. The financial line used to trigger the funding warning is "an arbitrary threshold designed to scare people," Stark said.

"Correcting this so-called 'problem' risks doing serious harm to Medicare beneficiaries. It will ... lead to attempts to reduce benefits, increase premiums or cap the amount Medicare will pay for premiums," Families USA's Ron Pollack told the Chicago Tribune.