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Hospital Insurance Trust Fund expected to remain solvent until 2024
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Although the current projection for depletion of the Medicare Hospital Insurance Trust Fund remains unchanged, a recent Medical Trustees Report urges lawmakers and President Obama to take action to prevent its exhaustion and secure Medicare’s long-term future.
The 2012 Annual Report of the Boards of Trustees of the Federal Hospital Insurance and the Federal Supplementary Medical Insurance Trust Funds states that while the Hospital Insurance Trust Fund, covering costs for Medicare Part A, will continue solvency through cost-saving measures put forth by the Affordable Care Act until 2024, the fund would only be able to cover 87% of projected revenue. In 2050, the fund is expected to cover only 67% of projected revenue.
According to a Centers for Medicare & Medicaid Services (CMS) news release, hospital insurance expenditures in 2011 were lower than predicted. However, the fund has exceeded income every year since 2008 and will continue to do so until exhausting itself in 2024.
“The Trustees Report tells us that while Medicare is stable for now, we have a lot of work ahead of us to guarantee its future,” Marilyn Tavenner, acting CMS administrator, stated in a CMS news release. “The Affordable Care Act is giving CMS the ability to do this work, with tools to lower costs, fight fraud and change incentives so that Medicare pays for coordinated, quality care and not the number of services.”
According to the CMS release, the Supplementary Medical Insurance Trust Fund, which covers Medicare Part B and Part D, is expected to be financially balanced through beneficiary programs and general revenue financing in the Part B account. Part B spending increased by an average of 5.9% during the past 5 years, while Part D spending increased by 7.2% on average during the same period. The Part D account will be balanced because of lower spending in 2011 and a predicted increase in generic drug use, according to CMS predictions.
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