While one presidential candidate wants a complete federal takeover of health care coverage, government or more accurately politicians have not learned how to manage what we have. Read the comments below from the latest Medicare Trustees Report.
Remember, these issues are within a system with plenty of co-pays, coinsurance, and deductibles and a far cry from covering every health care services as has been proposed.
When you hear the promises of new “free” stuff funded by new taxes, ask yourself where the money will come from to fix what we already have and is seriously underfunded.
Notwithstanding recent favorable developments, current-law projections indicate that Medicare still faces a substantial financial shortfall that will need to be addressed with further legislation. Such legislation should be enacted sooner rather than later to minimize the impact on beneficiaries, providers, and taxpayers.
The estimated depletion date for the HI trust fund is 2030, the same as in last year’s report. As in past years, the Trustees have determined that the fund is not adequately financed over the next 10 years. HI tax income in 2014 was somewhat higher than last year’s estimate, mostly due to adjustments for prior years,6 but is projected to be slightly lower through 2019; after 2019, however, projections of earnings throughout the period are higher mostly due to assumptions of slower projected growth in employer-sponsored health insurance—a factor that increases wages.
Although HI expenditures in 2014 were nearly equal to the previous estimate, projected expenditures are higher at the end of the 10-year period than shown in last year’s report, largely due to increases in provider payment update assumptions that reflect recent trends.
HI expenditures have exceeded income annually since 2008. However, the Trustees project slight surpluses in 2015 through 2023, with a return to deficits thereafter until the trust fund becomes depleted in 2030. In 2014, $8.1 billion in trust fund assets were redeemed to cover the shortfall of income relative to expenditures.
The Treasury also paid from the general fund $8.8 billion in interest to the HI trust fund in 2014. The assets were $205.4 billion at the beginning of 2014, representing about 76 percent of expenditures during the year, which is below the Trustees’ minimum recommended level of 100 percent. The HI trust fund has not met the Trustees’ formal test of short- range financial adequacy since 2003 (as discussed in section III.B). Growth in HI expenditures has averaged 2.1 percent annually over the last 5 years and is projected to average 4.8 percent over the next 5 years.
The SMI trust fund is adequately financed over the next 10 years and beyond because premium and general revenue income for Parts B and D are reset each year to cover expected costs and ensure a reserve for Part B contingencies. In 2016, however, a hold-harmless provision that restricts Part B premium increases for most beneficiaries is expected to cause a substantial increase in the Part B premium rate for other beneficiaries.
Part B and Part D costs have averaged annual growth of 5.3 percent and 5.1 percent, respectively, over the last 5 years, as compared to growth of 3.8 percent for GDP. Under current law, the Trustees project an average annual Part B growth rate of 6.7 percent over the next 5 years. For Part D, the estimated average annual increase in expenditures is 10.9 percent over the next 5 years. The projected average annual rate of growth for the U.S. economy is 5.3 percent during this period, significantly slower than for Part B and Part D.