Medicare insolvency to come earlier than reported last year - Policy Watch - Medicare insolvency could be reached by 2026 - Brief Article

Healthcare Financial Management, May, 2003

The Medicare Hospital Insurance Trust Fund (Part A) will dry up four years earlier than predicted last year, according to the March 17 report of the Medicare trustees. The report predicts insolvency by 2026 due to higher-than-expected spending, lower-than- expected revenue, and the growing demands of an aging population.

The outlook for the Supplementary Medical Insurance Trust Fund covering Part B of Medicare is better since it is funded through general revenues and beneficiaries' premiums. It is "adequately financed into the future," the trustees say. However, spending is rising rapidly, which means beneficiaries' Part B premiums will be adjusted automatically as costs go up. The Part B premium is expected to nearly double over the next 20 years.

The reports are available at www.cms.hhs.gov/publications/trusteesreport.>

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