Medicare Funding Warning Issued for Third Consecutive Year
WASHINGTON–For the third year in a row, its trustees are
warning that, unless Medicare makes some major changes, the
program’s Part A hospital fund will soon be singing its swan
song.
In the recent release of the long-term financial reports for
Social Security and Medicare, trustees said the outlook for both
programs remains grim, and, with a Medicare funding warning now in
place for the third year in a row, advisors say the next president
must propose legislation to cut the share of Medicare costs borne
by the government.
“As the baby boom generation moves into retirement, these
programs face progressively larger financial challenges,”
said Treasury Secretary Henry M. Paulson Jr., one of the trustees,
in press reports. “If we do not take action soon to reform
Social Security and Medicare, the coming demographic bulge will
jeopardize the ability of these programs to support people who
depend on them.”
In their report, the trustees said Social Security’s trust fund
will become insolvent by 2041, while Medicare’s hospital insurance
trust fund will be out of money by 2019. Both dates are the same as
those predicted last year.
Each year, the trustees’ report stirs debate on Social Security
and Medicare reform, but, as the choices lawmakers face to save the
programs–benefit cuts, higher payroll taxes, higher premiums for
seniors–are unpopular, any action has been tabled.
This year, President Bush sent Congress a proposal to cut the
programs, but Democrats who control both chambers are expected to
ignore his legislation. Still, lawmakers might select some
provisions from the proposal to curb Medicare spending–including
cuts to oxygen and power wheelchairs–and include them in the
Medicare bill that Senate Finance Committee Chair Max Baucus,
D-Mont., is expected to introduce in July.
“Working to make payment systems across Medicare more
accurate and reasonable, coupled with systemic reforms to increase
quality and slow the growth of costs, will be necessary to fix what
ails this vital program,” Baucus said in a March 25
statement.
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