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Medicare is bankrupt and will run $147 billion to $165 billion short of what it needs to pay hospital bills for the next 10 years, the chairman of the Senate Finance Committee said Tuesday.

Sen. Bob Packwood, R-Ore., appealed to the Clinton administration to lay aside partisan wrangling over the GOP's budget plans and help Congress find a solution for the ailing health insurance program for the aged and disabled.But Health and Human Services Secretary Donna E. Shalala said, "Mr. Chairman, we cannot destroy Medicare in order to save it."

President Clinton has refused to deal with the Republicans on health reforms until the GOP lays bare its entire plan for balancing the budget by 2002. Those blueprints are expected to include a quarter-trillion-dollars in savings from Medicare.

Shalala repeated Clinton's charge that the Republicans want to tap Medicare to pay for tax cuts for the wealthy.

Packwood said there was much less appetite in the Senate for tax cuts "until we balance the budget - if we balance the budget." He said even Clinton's massive, failed health reform bill last year would not have kept Medicare in the black.

On Monday, Rep. Bill Thomas, R-Calif., said the country should "face the demographics squarely" and raise the eligibility age for Medicare to 67 in the next century as Social Security's age goes up.

It would be "crazy" to let seniors get Medicare at 65 when they have to wait two years longer to draw full Social Security benefits, said Thomas, chairman of the House Ways and Means health subcommittee.

Shalala said Tuesday the Clinton administration "would not rule anything out," but expressed concern that such a move would "increase the number of people who have no health insurance in this country."

Packwood warned that every year that Congress delays, Medicare's problem "becomes more difficult" to solve.

"Medicare is bankrupt," he said. "It's someplace between $147 billion and $165 billion short. That's what we need to get by 2002 to keep Medicare solvent for 10 years."

Congress voted in 1983 to raise the Social Security retirement age gradually.

Starting in 2003, the normal age of 65 to draw full Social Security benefits will rise by two months a year, hitting 66 in 2009 for those born from 1943 through 1954. It starts going up again in 2021 for those born in 1955 and reaches 67 in 2027 for everyone born since 1960.