On March 25, the Trustees of the Medicare Trust Funds issued their annual report to Congress. In the report, the Trustees project that the Medicare Hospital Insurance, or “Part A,” Trust Fund, which covers inpatient hospital, nursing home, hospice, and many home care benefits, will be solvent until 2019, the same as last year’s projection. The Part A Trust Fund is financed mainly through payroll taxes—employees and employers each pay 1.45% of wages into the Trust Fund, while self-employed individuals pay 2.9%. Although the Trust Fund’s solvency has remained steady since last year’s report was issued, the Trustees—all members of President Bush’s Cabinet—sounded the alarm. 
     
“These projections demonstrate the need for timely and effective action to address Medicare’s financial challenges,” the report reads. “Consideration of such reforms should occur in the relatively near future. The sooner the solutions are enacted the more flexible and gradual they can be.” 
      
In a separate statement, one of the Trustees, Health and Human Services Secretary Michael O. Leavitt, pressed Congress to enact the Medicare spending reductions and reforms in the President’s proposed fiscal year 2009 budget. 

“We need to act quickly and effectively to address Medicare’s fiscal health, including enacting the steps proposed in the President’s budget, which would postpone the insolvency date of the Part A trust fund for ten years,” Secretary Leavitt said. 
     
The reaction from Congressional leaders, however, was far different. Representative Pete Stark (D-CA), Chairman of the Ways and Means Health Subcommittee, said, “Reports of Medicare’s death have been greatly exaggerated. Though the trigger has been pulled by Republican ideologues, this year’s Trustees report shows that Medicare remains solvent and sustainable.” Chairman Stark continued, “Through the years, Congress has regularly modified and modernized Medicare to accommodate advances in medicine and meet the demands of a growing population. I look forward to working with colleagues on both sides of the aisle to ensure Medicare's viability for future generations.” 
     
Stark called upon the Administration and Congressional colleagues to support reforms, including reductions in payments to Medicare Advantage plans, passed by the House of Representatives last year, as a way to ensure longer-term solvency of the Medicare program.