Trustees’ Report Paints Grim Picture Of Medicare’s Insolvency, With Hospital Fund Expected To Be Depleted By 2026
Total Medicare costs are expected to grow from 3.7% of gross domestic product in 2018 to 5.9% by 2038. Lawmakers have been struggling to come up with a solution for the country’s eroding entitlement programs, which have been at the center of a political tug of war between Republicans and Democrats for years.
The Associated Press:
Medicare, Social Security Face Shaky Fiscal Futures
The financial condition of the government's bedrock retirement programs for middle- and working-class Americans remains shaky, with Medicare pointed toward insolvency by 2026, according to a report Monday by the government's overseers of Medicare and Social Security. It paints a sobering picture of the programs, though it's relatively unchanged from last year's update. Social Security would become insolvent in 2035, one year later than previously estimated. (Taylor, 4/22)
The New York Times:
Social Security And Medicare Funds Face Insolvency, Report Finds
Meanwhile, Medicare’s hospital insurance fund is expected to be depleted in 2026 — the same date that was projected a year ago. At that point, doctors, hospitals and nursing homes would not receive their full compensation from the program and patients could face more of the financial burden. “Lawmakers should address these financial challenges as soon as possible,” the trustees of the program wrote. “Taking action sooner rather than later will permit consideration of a broader range of solutions and provide more time to phase in changes so that the public has adequate time to prepare.” (Rappeport, 4/22)
Modern Healthcare:
Medicare Spending To Shoot Up By 2038, Trustee Report Says
Reserves in the trust fund that covers Medicare Part A decreased by $2 billion to a total of $200 billion at the end of last year, according to the report. Another concern is that the trust fund's spending is "expected to be slightly higher than last year's estimates." In 2018, the Part A trust fund's spending exceeded income by $1.6 billion. While Medicare can dip into reserves to cover the shortfall, it cannot borrow money from other sources per federal law. Part A spending is slightly higher than last year's estimates because of higher-than-projected 2018 spending and higher projected payment updates. (King, 4/22)
Reuters:
Medicare Hospital Fund Reserves Likely To Be Exhausted In 2026: U.S. Report
U.S. healthcare costs are expected to be a hot topic during the 2020 presidential campaign, with uncertainty around possible cost-cutting solutions already weighing on healthcare stocks this year. Senator Bernie Sanders, among a large field of contenders for the Democratic presidential nomination, has unveiled a "Medicare-for-All" plan that would eliminate private insurance and shift all Americans to a public healthcare plan. (4/22)
The Wall Street Journal:
Social Security Costs To Exceed Income In 2020, Trustees Say
More broadly, rising Social Security and Medicare costs are also expected to weigh on the federal budget. Both programs together account for 45% of federal spending, excluding interest payments on the national debt, and have contributed to larger deficits that are set to exceed $1 trillion a year starting in 2020. Monday’s projections “almost mislead people into a false sense of complacency, when in the meantime these are the programs that are going to drive up budget deficits,” said Brian Riedl, a senior fellow at the Manhattan Institute, a right-leaning think tank. Over the next 10 years, he estimates, Social Security and Medicare benefit shortfalls will account for 90% of larger budget deficits. (Davidson, 4/22)
The Wall Street Journal:
Medicare B Costs For Retirees Projected To Rise
Medicare’s trustees projected Monday that the standard monthly premium in 2020 for Medicare Part B, which covers doctor visits and other types of outpatient care, will increase by $8.80 a month to $144.30. A final figure is expected in the fall. The increase comes after the Part B premium for most people rose modestly in 2019 to $135.50, from $134 in 2018. Even though Medicare Part A, which covers hospitalization, is free for most people 65 and older, Medicare Part B charges a monthly premium that currently ranges from $135.50 to $460.50, depending on a beneficiary’s income. (Tergesen, 4/22)
CQ:
Medicare's Financial Projections Same As Last Year
Ways and Means Committee Chairman Richard E. Neal, D-Mass., pledged to continue working to strengthen the program. "Today's Social Security report shows little overall change in the financial condition of the program. Meanwhile, we continue to see how the Medicare trust fund has not recovered from years of Republicans' harmful policies," he said in a statement. "Americans pay into these essential programs throughout their working lives, and they expect to receive the benefits they've earned." (Clason, 4/22)
The Hill:
Social Security Won't Be Able To Fund Full Payouts By 2035
Rep. Kevin Brady (Texas), the top Republican on the committee, said both parties should work together to reform the program. "Today’s Trustees Report is an important reminder that the time to act is now," Brady said. Budget watchdogs said that the longer reforms to the program are put off, the more painful they will be to carry out. (Hellmann, 4/22)
CQ:
Social Security Disability Fund Exhaustion Pushed Out 20 Years
Disability Insurance benefits under Social Security will remain solvent 20 years longer than projected just last year, according to a new report from the agency's trustees. The forecast remains bleak for the main Old-Age and Survivors Insurance program, which is still projected to become insolvent by 2034, same as in last year’s report. At that point, the program would be able to finance only 77 percent of scheduled benefits unless lawmakers make changes. (Sword, 4/22)
Bloomberg:
Top Trump Health Official Rips ‘Medicare for All’ After New Forecast
The Trump administration’s top Medicare official used an annual report on the program’s fiscal outlook to attack proposals by some Democrats to expand government health-care coverage to all Americans. The federal trust fund that finances much of the health-care program for the elderly and disabled is projected to run out in 2026, the same year forecast in the most recent projections published in June, trustees for Medicare said in a report Monday. (Tozzi, 4/22)
