Trustees’ Report: Medicare To Run Out Of Funds Five Years Sooner
Medicare will start running out of money in 2024 -- five years earlier than projected last year -- as a result of the sluggish economy, the program's trustees reported today.
The Associated Press: Trustees: Worsening Picture For Benefit Programs
The government says that a bad economy has shortened the life of the trust funds that support the nation's two biggest benefit programs. The annual checkup said that the Medicare hospital insurance fund will now be exhausted in 2024, five years earlier than last year's estimate. The new report says that the Social Security trust fund will be exhausted in 2036, one year earlier than before (Ohlemacher, 5/13).
The Wall Street Journal: Medicare Stirs Fray Over Debt
Both sides seized on the projections issued Friday by the trustees of the Social Security and Medicare trust funds to push for changing the programs, which are among the biggest drivers of projected budget deficits. However, Democrats and Republicans are far apart on what steps to take and how soon to act. "The trustees' report makes it clear that if we do nothing, Medicare will not be able to pay promised benefits to American seniors-and sooner than we thought," said House Speaker John Boehner (R., Ohio) in a statement. "With tens of millions of baby boomers beginning to retire, this is the moment to act." Treasury Secretary Timothy Geithner said the report showed "Social Security and Medicare benefits are secure today, but reform will be needed so that they will be there for current and future retirees" (Paletta, 5/14).
The New York Times: Slow Recovery Worsens Financial State Of Medicare
The Medicare report included a disclaimer by the chief Medicare actuary, Richard S. Foster. "The financial projections shown in this report for Medicare do not represent a reasonable expectation for actual program operations" in the short term or the long range, said Mr. Foster, a civil servant whose independence is protected by law. The projections assume that Medicare will cut doctors' fees by 29 percent on Jan. 1, as required under current law, but Congress routinely intercedes to block such cuts. Moreover, the report says that projected Medicare costs over 75 years are about 25 percent lower because of the new health care law. Under the law, Medicare will hold down payments to hospitals and other health care providers to reflect presumed increases in productivity. But, Mr. Foster said, if these constraints are kept in place, Medicare payments to providers will eventually be "far below the levels paid by private health insurance" (Pear, 5/13).
The Washington Post: Medicare Funds Will Be Depleted In 13 Years, Report Says
[A]fter the Medicare fund that covers hospital care for the elderly is exhausted, incoming revenue from Medicare taxes will initially be enough to cover 90 percent of annual expenses. That share will decline to about 75 percent by mid-century, then rise to 88 percent by 2085. This year also marks the first time that both programs are paying out more in benefits than they collect in revenue, requiring other government funds to make up the difference and adding to budget deficits (Aizenman, 5/13).
The Los Angeles Times: Medicare Could Run Out Of Money Sooner Than Previously Predicted
The new healthcare law includes a series of cuts to hospitals and other medical providers designed to spur increased efficiency. The law will also penalize hospitals where patients acquire dangerous conditions, such as infections, and reward doctors that better manage their patients' care. The trustees' report suggested that these efforts would slow the growth of Medicare costs by 25% over the next 75 years. But there is widespread recognition that this is not enough (Levey, 5/14).
Kaiser Health News: Gloomier-Than-Expected Forecast For Medicare
Swings in the predictions about the financial health of Medicare are common year to year. But the latest scorecard puts renewed pressure on the administration to find ways to improve the economy and make sure its experiments in the health law to lower health costs can actually work (Galewitz and Carey, 5/13).
Politico: Medicare To Run Out Of Money Five Years Sooner, Trustees Say
(Last year,) the trustees predicted the cost savings and tax increases in the Affordable Care Act would extend the life of the Medicare trust fund for 12 years. At that time, it was expected to run out of money in 2029, rather than 2017. That was a controversial conclusion, since most Republicans think the savings in the law can be used either to extend the life of the trust fund or to pay for the new health care reform programs, but not both (Nather, 5/13).
USA Today: Medicare, Social Security Running Out Of Money Faster
The government programs' trustees issued their gloomy findings today amid a rancorous debate in Washington over the future of the New Deal and Great Society programs, which eat up huge and growing shares of the federal budget. The pessimistic outlook was hastened since the last report in August 2010 by the continued impact of the recession, which has sapped revenue and increased spending (Wolf, 5/13).
MarketWatch: Medicare, Social Security Finance Outlook Worsens
Upon exhaustion [of Medicare's trust fund], dedicated revenue will be able to pay 90% of costs for the hospital-insurance program. Meanwhile, government officials said trust fund reserves for Social Security will be exhausted in 2036, one year sooner than expected last year (Mantell, 5/13).
Reuters: Medicare Funds Issue Fuels Budget Fight
The latest projections struck in the middle of an intense debate between the Obama administration and opposition Republicans about how to rein in the nation's runaway debt, set to hit the legal limit of $14.3 trillion on Monday. Republicans have been pushing for much deeper spending cuts than the administration prefers as a price for agreeing to raise the debt limit. The administration has warned of financial catastrophe if the ceiling on the debt is not raised. It has said the nation would begin defaulting on obligations on August 2 absent action (Somerville and da Costa, 5/13).
CNN Money: Social Security And Medicare To Run Short Sooner Than Expected
Combined, the cost of the programs represented 8.4% of the size of the nation's economy last year -- a figure that would jump to 11.8% by 2035. The reason: The number of beneficiaries will explode as more Baby Boomers retire and lower birth rates will slow growth in the number of workers paying into the system (Sahadi, 5/13).