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18 ¦ JULY 27, 2020 NEWS

¦ From COVID-19 on PAGE 17 That money in “accelerated and advance pay-
There are two ways the Trust Fund can get into ments” is supposed to be paid back, via a reduction
trouble: Either the money flowing in is too little, or in future payments. But there is a push in some quar-
the payments going out for care are too much. ters for that funding to be forgiven, which would
Most of those who watch Medicare finances agree make the Trust Fund’s hole even bigger.
that the larger problem right now is how much mon- It is not exactly clear what would happen if the
ey is being collected for the Trust Fund. That money Trust Fund were to become insolvent because it has
largely comes from the 1.45% payroll tax paid by never happened before. As the Congressional Re-
employees and employers. With so many people out search Service pointed out, “There are no provisions
of work due to pandemic-related shutdowns, cash in the Social Security Act that govern what would
flowing in has dropped dramatically. happen if insolvency were to occur.”
It’s far less clear what is hap- It is important to remember
pening on the spending side of that the fund becoming insolvent
Medicare Part A. (Medicare Part is not the same as being bankrupt.
B, which pays physicians and Insolvent means the Trust Fund
other outpatient costs, is funded would still have money flowing
by beneficiary premiums and in, but not enough to pay for all
general tax funding, so it cannot the care Medicare patients will
technically become insolvent.) consume.
While COVID-related hos- The Committee for a Most budget experts think
Responsible Federal Budget,
pital expenses for those on that Medicare would reimburse
Medicare are expected to be sub- a nonpartisan group of hospitals and other Part A pro-
stantial, Medicare hasn’t been budget experts focused on viders 100% of their claims until
reimbursing as much care of fiscal policy, estimates that the fund truly runs out of money.
other sorts. In some cases, that’s Then it would pay claims only
the pandemic will cause

because hospitals in COVID hot the Part A Trust Fund to be as more money flows in. Others
spots temporarily stopped do- unable to pay all of its bills think Medicare might reimburse
ing elective procedures like joint starting in late 2023 or early only a percentage of those claims,
replacements. In other cases, pa- but that might require congres-
tients with non-COVID ailments 2024. sional action.

have been afraid to go to hospitals Meanwhile, one would expect
for fear of catching the virus. the hospital industry to be ring-
Also, said Goldwein, health ing the alarm bells as potential
care use tends to fall in recessions, insolvency approaches. But that’s
even for Medicare, whose benefi- not happening.
ciaries are largely retired. “They’re more concerned with
In the end, he said, “we basi- next month than with 2023 at this
cally threw our hands up and said we don’t have the point,” said Goldwein.
information” to estimate how health costs will affect Chip Kahn, president and CEO of the Federation
the Trust Fund’s financing. of American Hospitals, agreed. “I’m not going to
There is one other COVID-related policy that worry about this right this minute,” he said. “At this
could hasten the depletion of the Trust Fund. At point, my focus is completely on COVID.”
least $60 billion of the funding provided as part of Kaiser Health News (KHN) is a national health
the CARES Act to help hospitals weather the pan- policy news service. It is an editorially independent
demic came not from the general treasury, but from program of the Henry J. Kaiser Family Foundation
the Trust Fund itself. which is not affiliated with Kaiser Permanente. ¦

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