Trustees: Medicare’s in dire straits
March 29, 2004
WASHINGTON - Medicare’s hospital insurance trust fund is scheduled to go broke in 2019, seven years sooner than the program’s trustees projected last year.
The deteriorating financial picture for the health care program is a result, in part, of the new Medicare prescription drug act (MMA) that will swell costs by more than $500 billion over 10 years, according to the annual report by government trustees released last week.
The report comes less than two weeks after Medicare’s actuary alleged that the administration ordered him to withhold information from lawmakers regarding MMA’s true cost.Â Lawmakers voted on the bill assuming it would cost $400 billion over 10 years.
The trustees made three blunt statements that highlighted the problems, according to the New York Times:
- Under current law, Medicare's hospital insurance trust fund, which pays for inpatient hospital care, will be exhausted in 2019, seven years earlier than forecast last year.
- Medicare will grow much faster than the economy as a whole, increasing from 2.6% of the gross domestic product last year to 3.7 percent in 2010, 7.7% in 2035 and nearly 14% at the end of the 75-year period commonly used for long-range projections.
- Projected Medicare costs would exceed those for Social Security in 2024. By 2078, the level of Medicare expenditures would represent nearly twice the cost of Social Security.