WASHINGTON, D.C. - Ways and Means Health Subcommittee Chairman Pete Stark (D-CA) issued the following statement in response to the 2009 report of the Board of Trustees of the Medicare Trust Fund, released today:
“The news from the Medicare Trustees earlier today underscores the urgent need for health reform. While opponents will use this as another excuse to arbitrarily slash and burn Medicare, our energies are better focused on how to reform our health system and rein in rising health costs, which will benefit Medicare beneficiaries, all American taxpayers and Uncle Sam.
"Today`s news is sobering, but we have seen worse reports in years past and the Congress has always stepped in to strengthen the program’s financial footing, and we will do so again. We should also remember that the social insurance programs are held to a standard not applied anywhere else. No one looks at the 75-year solvency of private insurance or the 75-year costs of our nation’s defense spending or the Bush tax cuts, yet we obsess about that number for Medicare. The most productive way to strengthen the long-term solvency of this program is to focus on comprehensive reform that will reduce costs."
Background: The Trustees Report projects a two-year drop in the Part A Trust Fund’s solvency date -- from 2019 to 2017. This is primarily a legacy problem due to a drop in payroll tax revenues because of the Bush economy. Solvency remains strong by historical standards, though it would be substantially stronger if Medicare Advantage overpayments were eliminated. Because payments to private Medicare Advantage plans come from both Part A and Part B, all measures of financial health - e.g., solvency, share of general revenue financing, etc. -- are worse than they would otherwise be as a result of the overpayments. The President’s budget would extend solvency by two years (back to 2019), primarily as a result of the savings from eliminating Medicare Advantage overpayments.
