Ehrlich on Washington column, June 9, 1996

MEWS FROM Robert L. Ehrlich, Jr. Second Congressional District of Maryland 1407 York Road, Suite 304 Lutherville, Maryland 2 1 093 EHRLICH ON WASHINGTON By Congressman Robert L. Ehrlich, Jr. 3 1 5 Cannon House Office Building Washington, D.C. 20515 Week of June 9, 1996 MEDICARE: IN WORSE HEALTH THAN WE THOUGHT In its 1995 report, the Medicare Board of Trustees— a presidentially-appointed panel including three Clinton cabinet members-predicted that the Medicare Hospital Insurance Trust Fund (also known as Medicare Part A) will be bankrupt after 2002. Last week, the trustees released their 1996 report. According to this latest report, Medicare is in even worse financial shape than originally thought. The 1995 report predicted a $5 billion surplus in 2002. This year’s report shows that the fund will have a $101 billion deficit by 2002. According to the earlier report, Medicare expenditures were expected to exceed revenues by $26.3 billion in 2000, requiring the government to dip heavily into the program’s reserve funds. Now the trustees predict all reserve funds will be exhausted by that time. Moreover, Medicare Part A will now achieve deficit status by 2001— much earlier than originally expected. As disturbing as these new figures are, they are hardly surprising. Last year the new Congress acknowledged the impending Medicare crisis, and sought to deal with it in an open, straightforward manner. I supported an honest and reasonable Medicare reform plan that increased benefits; combated fraud and abuse within the system; and ensured the system’s long¬ term solvency. It raised per beneficiary spending by $4,800 in 1995 to $7,100 in 2002.