Trustees: Medicare now projected to remain solvent until 2030

The new projections give Medicare an additional four years of solvency compared to last year's report by the trustees for Medicare and Social Security.

The full trustees' report is available online.

Washington Post: Medicare Finances Improve Partly Due To ACA, Hospital Expenses, Trustee Report Says
Medicare's financial health is improving, according to a new official forecast that says that the program will remain solvent until 2030 -; four years later than anticipated a year ago -; because of the Affordable Care Act and lower-than-expected spending on hospital stays (Goldstein, 7/28).

New York Times: Outlook for Medicare Trust Fund Improves, Though Shortfall Looms, Report Finds
The financial condition of Medicare has benefited from a remarkable slowdown in national health spending, attributed in part to the Affordable Care Act, which curbed Medicare payments to many health care providers and encouraged them to find more efficient ways of delivering care. Slow growth of wages and prices, following the recession of 2007-9, has also been cited by the trustees as a factor restraining the growth of Medicare (Pear, 7/28).

Wall Street Journal: Medicare, Social Security Disability Fund Headed in Different Directions
A few years ago, the trustees projected Medicare's primary trust fund would exhaust all of its reserves by 2016. Once the trust fund runs out of reserves, the government can only pay benefits based on the amount of money it receives, largely from tax revenue, which would represent a cut from current levels. The trustees said Medicare would only be able to pay 85% of benefits after the trust fund is exhausted in 2030, a level that would fall over time (Paletta, 7/28).

Reuters: Slower U.S. Healthcare Cost Rise Extending Life Of Medicare Fund: Trustees
At a news conference, the trustees called for congressional action to address both Medicare and Social Security. "Both of these vitally important programs are fiscally unsustainable over the long run and will require legislative intervention to correct," said trustee Robert Reischauer. "The sooner the policymakers address these challenges, the less disruptive the unavoidable adjustments will be ... The sooner the lawmakers act, the broader will be the array of policy options that they can consider" (Lange and Morgan, 7/28).

CNN Money: Medicare's Outlook Improves As Health Spending Slows
On Medicare, the trustees now project that the trust fund for Part A, which covers hospital costs for seniors, will run dry by 2030. Thereafter, it would only be able to pay out 85% of projected benefits -- a figure that would fall to 75% by 2050. That's an improvement of four years over last year's projection. What's more, if Congress wanted to raise taxes to close the 75-year shortfall, the increase needed would be a little less painful than the trustees estimated a year ago: They now say the 2.9% Medicare payroll tax would have to go to 3.77% (Sahadi, 7/28).

The Hill: Medicare, Social Security Head Toward Insolvency, At Slower Rate
But the trustees for both Medicare and Social Security also continue to paint a dire long-term picture for programs that will come under more strain, when it faces a flood of retirees in the coming years.
"The Trustees Reports underscore the importance of making reforms to Social Security and Medicare," Treasury Secretary Jack Lew said. "As the largest generation in American history enters retirement, the pressure on our social insurance programs is growing, and we must make manageable changes now, so we do not have to make drastic changes later" (Becker, 7/28).

Vox: The Big Health Wonk News In Today's Medicare Report
But there's a nugget buried in the report that will be especially interesting to the health wonk crowd: it seems that, for the first time ever, Medicare is assuming that Congress passes a doc-fix. ... In previous Medicare Trustees' reports, the authors would never assume that they would pass this fix -; they would only operate on the baseline of what law is standing right now (that would be the law that funds doctors at a lower rate). After 12 years of watching doc-fixes pass and pass again, the group has changed its stance (Kliff, 7/28).

http://www.kaiserhealthnews.orgThis article was reprinted from with permission from the Henry J. Kaiser Family Foundation. Kaiser Health News, an editorially independent news service, is a program of the Kaiser Family Foundation, a nonpartisan health care policy research organization unaffiliated with Kaiser Permanente.

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