KHN Morning Briefing

Summaries of health policy coverage from major news organizations

Medicare Forecast: Solvent Until 2026, Though Baby Boomer Costs Loom

News outlets covered the annual report of Social Security and Medicare Board of Trustees, released today. 

The Associated Press: Trustees Say Medicare Exhausted In 2026
The government said Friday that Medicare's giant hospital trust will not be exhausted until 2026, two years later than projected last year, ... The reasons given for the improved financial outlook for Medicare were an overall slowdown in health care spending, particularly on skilled nursing care, as well as lower projected costs for popular insurance plans available within the Medicare program. ... Washington has been unable to reach consensus on an agreement to strengthen the finances of the government's biggest benefit programs, which together account for about one-third of federal spending each year (Crutsinger, 5/31).

NBC News: Medicare Fund Insolvency Date A Bit Further Away Than Last Year
The trustees are Treasury Secretary Jack Lew, Health and Human Services Secretary Kathleen Sebelius, Acting Secretary of Labor Seth Harris, Acting Commissioner of Social Security Carolyn Colvin and two citizen trustees appointed by the president, Charles Blahous, a former economic advisor to President George W. Bush and economist Robert Reischauer, former head of the Congressional Budget Office. Nearly 50 million Americans collect Medicare benefits ... Inexorable demographic pressures, reflecting the fertility patterns and lengthening life spans of the past several decades, is slowly pushing [Medicare and Social Security] both programs toward insolvency, with too few younger workers and too many older people reaching eligibility age to collect benefits (Curry, 5/31).

Politico: Medicare Exhausted In 2026, Trustees Say 
“The Medicare report demonstrates, once again, the importance of the Affordable Care Act, which has strengthened Medicare’s finances by reining in health care costs,” Treasury Secretary Jack Lew said in prepared remarks. ... In 2026, the hospital trust fund will only be able to pay 87 percent of the claims promised by Medicare. The 75-year deficit in the program is now expected to be 1.1 percent of taxable payroll, down from 1.35 percent last year and almost 3.9 percent before the federal health care law passed (Norman, 5/31).

Kaiser Health News: Slowdown In Medicare Funding Extends Trust Fund
The Medicare spending projections also encompass areas of current law that are not likely to remain, such as a 25 percent payment cut for Medicare physician services scheduled to take effect on Jan. 1 that trustees say “is highly unlikely.” Trustee Robert Reischauer said it would be a mistake to make too much of the two-year extension on the life of the Medicare hospital trust fund. The Medicare projections involved a lot of uncertainty, he said, both on the legislative front — Congress will likely stop the scheduled Medicare physician payment cut, for example — and from the cost impact that new technologies, drugs and medical devices will have. Those “historically have tended to push up costs,” he said (Carey, 5/31).

The New York Times: Outlook for Medicare Has Improved a Bit, U.S. Estimates
The [health] law trimmed Medicare payments to many health care providers on the assumption that they would become more productive. Another factor, officials said, is the Budget Control Act of 2011, which calls for reductions of roughly 2 percent in projected Medicare spending from 2013 to 2021. ... The slowdown in Medicare spending has broad implications for the federal budget and the economy. “In recent years,” said Douglas W. Elmendorf, the director of the Congressional Budget Office, “health care spending has grown much more slowly both nationally and for federal programs than historical rates would have indicated.” (Pear, 5/31).

The Washington Post: Medicare Trust Fund To Last To 2026 As Health Costs Drop
In his most recent budget request, Obama proposed ... to reduce Medicare spending by reducing “excessive subsidies to prescription drug companies and ask[ing] wealthy senior to contribute a little more,” as Lew put it.
Those proposals have gone nowhere in Congress, as members of both parties have shied away from policies that would reduce benefits for the elderly, the fastest-growing segment of the population and most reliable voters. People in both parties hold out some hope for a deal to address the entitlement programs when Congress faces a debt-limit deadline later this year (Montgomery, 5/31).

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