Morning Briefing
Summaries of health policy coverage from major news organizations
Medicare's Future More Grim Than Previously Projected, Due In Part To GOP Tax Cut, Individual Mandate Repeal
The New York Times: Medicare’s Trust Fund Is Set To Run Out In 8 Years. Social Security, 16.
The financial outlook for Medicare’s Hospital Insurance Trust Fund deteriorated in the last year, and Social Security still faces serious long-term financial problems, the Trump administration said on Tuesday. The projections are the first from the administration since President Trump signed a $1.5 trillion tax cut into law in December. They show no sign that a burst of economic growth will significantly improve the finances of the government’s largest entitlement programs. (Pear, 6/5)
The Associated Press: Trustees Report Warns Medicare Finances Worsening
The report from program trustees says Medicare will become insolvent in 2026 — three years earlier than previously forecast. Its giant trust fund for inpatient care won't be able to fully cover projected medical bills starting at that point. The report says Social Security will become insolvent in 2034 — no change from the projection last year. The warning serves as a reminder of major issues still languishing while Washington plunges deeper into partisan strife. Because of the deterioration in Medicare's finances, officials said the Trump administration will be required by law to send Congress a plan next year to address the problems, after the president's budget is submitted. (Alonso-Zaldivar and Taylor, 6/5)
USA Today: Medicare, Social Security Face Money Challenges, Affordable Care Act
Trustees said the trust fund for hospital expenses is not sufficiently financed over the next decade. That's in part due to lower payroll taxes because of lower wages and lower Social Security benefit taxes, the trustees said. Spending was also projected to be somewhat higher than last year’s estimates due to legislative changes that led to higher hospital and Medicare Advantage payments. (O'Donnell and Alltucker, 6/5)
Modern Healthcare: Medicare Funds Drying Up Faster Than Estimated
"These amounts do not vary based on underlying economic conditions, nor are they expected to keep pace with the average rate of physician cost increases," the report said. "Absent a change in the delivery system or level of update by subsequent legislation, access to Medicare participating physicians may become a significant issue." (Dickson, 6/5)
Kaiser Health News: Medicare Financial Outlook Worsens
A senior government official briefing reporters attributed the worsened outlook for Medicare to several factors that are reducing funding and increasing spending. He said the trustees projected lower wages for several years, which will mean lower payroll taxes, which help fund the program. The recent tax cut passed by Congress would also result in fewer Social Security taxes paid into the hospital trust fund, as some higher-income seniors pay taxes on their Social Security benefits. The aging population is also putting pressure on the program’s finances. (Galewitz, 6/5)
Bloomberg: Medicare Fund Falls Short In 2026, Sooner Than Last Forecast
The long-term solvency is also affected by lawmakers’ repeal in February of a controversial Obamacare effort to cut spending known as the Independent Payment Advisory Board, according to the official. (Edney, 6/5)
The Washington Post: A Crucial Medicare Trust Fund Will Run Out Three Years Earlier Than Predicted, New Report Says
Seema Verma, administrator of the Centers for Medicare and Medicaid Services, called on Congress to embrace Medicare proposals in President Trump’s budget, saying that they “would strengthen the integrity of the Medicare program.” Along with strategies to try to slow spending on prescription drugs, one proposal would shift responsibility for uncompensated care payments from the Medicare program to the Treasury. The annual reckoning of the stability of the nation’s two largest entitlement programs amplifies earlier warnings that both are unsustainable over time. It also urges Congress to revise the programs to ward off the shortfalls soon to “minimize adverse impacts” on the tens of millions of elderly and other vulnerable people who rely on the government help. (Goldstein, 6/5)
The Wall Street Journal: Social Security Expected To Dip Into Its Reserves This Year
The nation’s aging population is boosting the costs of Social Security and Medicare, while revenue gains lag due to slower growth in the economy and the labor force. About 61.5 million people receive retirement or disability benefits from Social Security and 58.4 million receive Medicare. (Harrison, 6/5)
Politico: Medicare To Go Broke Three Years Earlier Than Expected, Trustees Say
President Donald Trump has avoided major changes to Medicare or Social Security after promising not to cut them during the campaign. Trump has argued a growing economy would forestall cuts to the programs, but today’s report underscored the financial challenges facing the nation‘s entitlements as more baby boomers reach eligibility age. The Medicare trust fund only pays for Part A, which covers hospitalizations. The other main pieces of the program, covering physician visits, outpatient services and prescription drugs, are paid for primarily with general fund revenues. (Demko, 6/5)
