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Report Says Medicare to Go Broke by 2019 29 minutes ago
By MARK SHERMAN, Associated Press Writer
WASHINGTON - Medicare will have to begin dipping into its reserves this year and without changes will go broke by 2019 — seven years earlier than expected — because of rising health costs, trustees warned Tuesday.
The deteriorating financial picture for the program, which will start a new seniors drug benefit in 2006, provided fuel for an already-hot political debate in which both parties are courting graying baby boomers in this year's elections for control of the White House and Congress.
Democrat John Kerry (news - web sites) said the report showed President Bush (news - web sites) had squandered on tax cuts money that could rescue Medicare. The White House sought to blame the program's problems on rising health costs, and not the drug benefit Bush signed in December.
Medicare is the government's main health care program for older and disabled Americans.
The trustees' annual projections said Social Security (news - web sites)'s finances remained the same and the program's projected insolvency date remained 2042.
The new Medicare law will swell program costs by more than $500 billion over 10 years and more than $8 trillion over 75 years, according to the report.
As they did last year, the trustees said that projected lower tax receipts devoted to the program and higher expenditures for hospital care also contributed to the growing financial problem.
The drain on the trust fund and projected costs for other aspects of Medicare, including doctor visits and prescription drugs "raise serious doubt about the sustainability of Medicare under current financing arrangements," the trustees said.
Without offering specifics, the trustees — four of six are senior administration officials — said Congress would have to act soon to fix Medicare's finances.
One trustee, Health and Human Services (news - web sites) Secretary Tommy Thompson, however, said preventive-care benefits in Medicare and coordinated care for chronic illnesses that are part of the new law would help to contain costs.
The report quickly became presidential campaign fodder.
Democrats said the lack of new jobs in the economy is responsible for lower receipts from wage taxes. Kerry blamed "George Bush's irresponsible tax breaks for the wealthy and his giveaway to the prescription drug companies" and said the system would be broke by the time people 50 or younger reach retirement.
"After inheriting a strong economy and record surpluses, this president had the chance to stay the course of fiscal responsibility and shore up both the Social Security and Medicare trust funds. Instead, he made a mockery of fiscal responsibility," Kerry said.
The Bush-Cheney campaign, meanwhile, criticized Kerry who — like many Democrats — voted against the prescription drug benefit. Kerry, the campaign said, "would bankrupt Medicare while denying seniors access to cost- and life-saving prescription drugs and preventive care."
Republicans pressed for the overhaul of Medicare last year to give private insurers a much larger role in the program as a way, Bush and others said, to control long-term costs.
But the government's own projections are that private managed care plans will cost taxpayers more than traditional Medicare for the foreseeable future.
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