Testifying Before Ways and Means, Thompson Now Says Part A Trust Fund Will Be Used For Part A Costs Only

Trying to alleviate Democrats' concerns that President Bush is, in effect, planning to "rob" the Medicare Part A Hospital Insurance trust fund to pay for his proposed tax cut, HHS Secretary Tommy Thompson said on March 14 that all payroll tax revenue collected for the Part A trust fund would be "used exclusively" on Medicare Part A, the New York Times reports. Last month, Bush suggested that the surplus from the Part A trust fund -- estimated by the President at $526 billion over 10 years -- was part of a "contingency fund" that could be used on programs other than Medicare. Bush also set off a "furor" last month by suggesting that he would adopt a "new method of accounting" that would show Medicare was in "dire financial straits," the Times reports. In contrast, the Clinton administration had projected that the Part A trust fund would run a surplus until 2025. Thompson, testifying before the House Ways and Means Committee, said, "The Medicare money is going to be used strictly for Medicare. Every penny of it is going to be used for Medicare," adding, "I intend to keep it for Part A." The Part A trust fund pays for Medicare beneficiaries' hospital care, nursing home care, hospice services and some home health care. He added that the Part A trust fund could be used for purposes other than paying for Medicare only if Congress changed the existing law, the Times reports (Pear, New York Times, 3/15).

A Contradiction?
CongressDaily reports that Thompson's testimony yesterday "would appear to contradict" what he told House and Senate budget committees last week. At that time, Thompson "strongly implied" that the Part A trust fund could be used to pay for Part B services (Rovner/Earle, CongressDaily, 3/14). Part B covers outpatient hospital care, doctors' visits and home health services not covered under Part A (Kaiser Daily Health Policy Report, 3/13). On March 7, Thompson told the House Budget panel: "The president feels it's impossible to separate Part A and Part B."

Democrats Still Wary
Democrats were not satisfied by Thompson's comments yesterday, CongressDaily reports (CongressDaily, 3/14). Rep. Robert Matsui (D-Calif.) said, "We joined the issue today, but I am not any more comfortable than I was before the hearing. Secretary Thompson was being as direct as he could, but ultimately these decisions will be made by the White House Office of Management and Budget and the White House chief of staff, in negotiations with Congress." In the meantime, some House Republicans say they would preserve the Part A trust fund, even though their Senate counterparts voted on March 13 to block an effort to restrict Congress' use of the fund. House Budget Committee Chair Jim Nussle (R-Iowa) said House Republicans would not include the Part A trust fund in a contingency fund, adding, "That's a settled question in the House. We have a lockbox. We're going to lock that away as separate" (New York Times, 3/15). For information on the financial status of the Part A trust fund, please visit http://www.hcfa.gov/pubforms/actuary/. For more information on President Bush's budget, please visit http://www.whitehouse.gov/news/usbudget/blueprint/budtoc.html. A Healthcast of Thompson's testimony to the Ways and Means committee is available at http://www.kaisernetwork.org/health_cast/hcast_index.cfm?display=detail&hc=161">www.kaisernetwork.org/health_cast/.