By Mark Huffman
ConsumerAffairs.Com
August 6, 2010
The Trustees of the Medicare Trust Fund have announced the medical benefit for seniors has enough money to operate for an additional 12 years -- to 2029.
The projection is largely an accounting forecast of revenue and expenses in the future. The fund receives its money from a portion of the payroll tax. Currently, less money is flowing into the fund because fewer people have jobs.
HHS Secretary Kathleen Sebelius hailed the news and credited the recently passed health care reform legislation.
"It is clear that the Affordable Care Act is helping to strengthen the solvency of the Medicare Trust fund and preserve this important program that millions of Americans rely on for their health care," Sebelius said.
Rising costs
In 2009, Medicare provided health insurance coverage to 46.3 million people, according to Dr. Don Berwick, Administrator for the Center for Medicare and Medicaid Services. Total Medicare expenditures were $509 billion and income was $508 billion. The average Medicare benefit per enrollee was $11,743.
"These Medicare expenditures were slightly lower than estimated in last year's Trustees Report," Berwick said. "Within the total, Part A and Part D spending were each slightly lower than estimated, while Part B outlays were slightly higher."
Medicare expenditures in 2009 represented 3.5 percent of Gross Domestic Product (GDP). Last year, these costs were projected to increase steadily to over 11 percent of GDP by the end of the long-range, 75-year projection period.
In the new report, based on the cost-containment efforts of the Affordable Care Act, Medicare is projected to represent 6.4 percent of GDP in 2084.
The health care law calls for cutting $500 billion in Medicare spending over 10 years.
Berwick said the Hospital Insurance (Part A) trust fund is projected to be able to pay all benefits on time until 2029 -- 12 years longer than last year's estimate of 2017. And the long-range actuarial deficit for HI is only one-sixth of its prior level-specifically, 0.66 percent of taxable payroll versus 3.88 percent.
