May 1, 2006 4:33PM

Medicare’s Trustees Pull the Trigger

Fortunately, the trustees’ report (see below) does help lay the groundwork for future Medicare reform. One of the few helpful provisions of the 2003 Medicare Modernization Act is what is known as “the trigger.” As Medicare’s trustees explain:

If in two consecutive [trustees] reports, it is determined that the difference between Medicare outlays and dedicated financing sources will reach 45 percent within the first 7 years, then a “Medicare funding warning” will be triggered… This finding would require the President to submit to Congress, within 15 days after the date of the next budget submission, proposed legislation to respond to the warning. Congress is then required to consider this legislation on an expedited basis. This new requirement will help call attention to Medicare’s impact on the Federal Budget.

As they did in 2004 and 2005, this year the trustees reported that the difference between dedicated funding and outlays will first exceed 45 percent of Medicare outlays in 2012. Since that is just six years off, the trustees pulled the trigger.

Since it is likely that the trustees will pull the trigger again next year as well, reformers need to start gearing up for that fight today. Here’s one place to start.