Trustees: Medicare's coffers running dry
WASHINGTON -- Medicare's long-term financial picture looks worse than ever and "solutions can and must be found to reduce the rate of growth in costs," stated Medicare Trustees in their annual report released May 1.
"The early introduction of reforms increases the time available for affected individuals and organizations--including healthcare providers, beneficiaries, and taxpayers--to adjust their expectations," they stated. "We believe that prompt, effective and decisive action is necessary to address these challenges."
Total Medicare expenditures were $336 billion in 2005, and they're expected to increase in future years at a faster pace than either workers' earnings or the overall economy, the trustees stated.
The biggest immediate concern: The Hospital Insurance Trust Fund will go bust in 2018, two years earlier than predicted in last year's report, due to slightly higher-than-expected costs in 2005 and some upward revisions in utilization of services.
For both Part B and Part D accounts, income is projected to equal expenditures for all future years--but only because beneficiary premiums and general revenue transfers will be set to meet expected costs each year, the trustees state in their report.