The Congressional Budget Office challenged claims by health-care overhaul proponents that Medicare savings in Senate legislation would help finance expanded coverage and postpone the bankruptcy of the medical program for the elderly.
The nonpartisan agency said the $246 billion it projected the legislation would save Medicare can’t both finance new programs and help pay future expenses for elderly covered under the federal program.
Nor could those savings be used to extend the solvency of Medicare, set to run out of money in 2017, the budget office said in a letter to Senate Republicans.
The estimated Medicare savings in the legislation overstate “the improvement in the government’s fiscal position,” the CBO said in the letter.
“The true increase in the ability to pay for future Medicare benefits or other programs would be a good deal smaller,” the budget office said.
The budget office said that whenever the Medicare trust fund runs a surplus, the savings are turned over to the U.S. Treasury, which issues bonds to borrow for the future needs of participants in the health-care program for the elderly. The trust fund is currently running annual deficits.
North Dakota Democrat Kent Conrad, chairman of the Senate Budget Committee, has said that the Senate legislation would postpone the Medicare trust fund’s projected 2017 insolvency by several years.
To credit such projected savings as helping to extend Medicare’s solvency “ignores the burden that would be faced by the rest of the government later in redeeming the bonds held by the trust fund” to pay for future Medicare expenses, the budget office said.
Arguments that the Medicare savings would both extend Medicare’s solvency and help finance “new spending outside of Medicare would essentially double count a large share of those savings,” the CBO said.