Medicare to run out of funds by 2018

WASHINGTON — A government forecast predicts funding for older Americans will run out by 2018, which is 2 years earlier than predicted last year.

The Medicare Trustees Report is an annual report to Congress from the trustees of the Centers for Medicare and Medicaid Services, who monitor the fiscal health of the Medicare and Social Security Programs. In the report, the trustees said the fund’s solvency will expire in 2018, and by 2010, “expenditures are projected to exceed annual income from all sources.”

The long-range financial outlook will continue to remain bleak unless spending is slowed or halted, the trustees said in the report.

Part B expenditure projections in the report are gloomy as well, they said. “Under the ‘sustainable growth rate’ formula used in current law, the Trustees project that physician payment rates would have to be reduced by 4% to 5% each year through at least 2015,” the report said. As a result of higher spending during 2005 and reduced assets, “it is expected that the Part B monthly premium rate will need to be increased by roughly 11% for 2007, to $98.20,” the trustees concluded.