2 Years Added To Expected Life Of Medicare Trust Fund
Filed by KOSU News in US News.
May 31, 2013
“The trust fund that finances Medicare’s hospital insurance coverage will remain solvent until 2026, two years beyond what was projected in last year’s report,” the program’s trustees reported Friday.
In a statement, the administrator of the Centers for Medicare & Medicaid Services gives some of the credit to the Affordable Care Act, also known as Obamacare.
“Thanks to the Affordable Care Act, we are taking important steps to improve the delivery of care for seniors with Medicare,” said Marilyn Tavenner. “These reforms aim to reduce spending while improving the quality of care, and are an important down payment on solving Medicare’s long term financial issues.”
The Washington Post notes that the trustees “also credit lower costs and use rates in ‘most … service categories — especially skilled nursing facilities’ — a development that most economists believe is in part due to the recent recession but also to more fundamental efforts to reduce costs throughout the health care industry.”
Also Friday, Social Security trustees reported the trust fund for that program is still expected to be exhausted in 2033 — a forecast that’s unchanged from a year ago. Once the fund is depleted, the program would have enough cash coming in only to pay about two-thirds of projected benefits.
More immediately, the trust fund that’s specifically dedicated to Social Security’s disability insurance program is still expected to be depleted in 2016.
As The Associated Press notes, both Medicare and Social Security “face significant funding challenges as the giant baby boom generation continues to retire.”
Treasury Secretary Jacob Lew said in a statement that:
“Today’s reports make clear that while both Social Security and Medicare have sufficient resources to meet their obligations for at least the next decade, it is important that we put in place reforms to strengthen these programs. Fundamentally, Social Security and Medicare benefits are secure today, but reform will be needed so that they will continue to be there for current and future retirees.”
In 2009, when Medicare trustees were predicting their trust fund would be exhausted in 2017 and Social Security trustees were saying their fund would be used up by 2037, NPR’s John Ydstie and April Fulton explained how those programs are financed. [Copyright 2013 NPR]