1995 BOARD OF TRUSTEES ANNUAL REPORT ON THE FEDERAL HOSPITAL INSURANCE AND Packwood, Hon. Bob, a U.S. Senator from Oregon, chairman, Committee Baucus, Hon. Max, a U.S. Senator from Montana ADMINISTRATION WITNESSES Shalala, Hon. Donna E., Secretary, Department of Health and Human Serv- Chater, Hon. Shirley S., Commissioner of Social Security, Washington, DC Ross, Stanford G., public trustee, Federal Hospital Insurance and Federal Supplementary Insurance Trust Funds, Washington, DC Walker, David M., public trustee, Federal Hospital Insurance and Federal (III) 1995 BOARD OF TRUSTEES ANNUAL REPORT ON THE FEDERAL HOSPITAL INSURANCE AND FEDERAL SUPPLEMENTARY INSURANCE TRUST FUNDS TUESDAY, MAY 9, 1995 U.S. SENATE, COMMITTEE ON FINANCE, Washington, DC. The hearing was convened, pursuant to notice at 9:30 a.m., in room SD-215, Dirksen Senate Office Building, Hon. Bob Packwood (chairman of the committee) presiding. Also present: Senators Simpson, Baucus, Bradley, Pryor, Graham, and Moseley-Braun. OPENING STATEMENT OF HON. BOB PACKWOOD, A U.S. SENATOR FROM OREGON, CHAIRMAN, COMMITTEE ON FINANCE The CHAIRMAN. The Committee will come to order. This is the first in a series of four hearings on the subject of Medicare. I might say, Max, what I am going to try to do, since we have votes at 10:30, is try to finish with these two witnesses, then take a break, and then have the public trustees. Mr. Walker cannot get here until 11:00 o'clock anyway, but at least that is my proposed time schedule. As we have looked at Medicare over the years, and looked at the reports of the trustees, I do not know why any of us would be surprised that Medicare is bankrupt. This year we will pay out more money in Medicare benefits than we take in. The only reason that the Medicare trust fund has what you might call a surplus is that it does have some Government bonds, which it is liquidating. They will all be gone by the year 2002. Then it will have no money, other than what comes in from taxes. And the taxes will be far short of paying the benefits. And no one in the Government has any authority to change the benefit structure by fiat, or nobody has the authority to make some payments and not others. It just is bankrupt. And each year, we put off fixing it, or make it slightly more difficult. We will face the same problem on Social Security, although not as soon. But in about 15 or 20 years, it will be paying out more money than it takes in, and then it will run out of all of its bonds a decade or so after that. And I suppose we can postpone facing both problems. But every year it becomes more difficult. I understand the politics involved in (1) |