It's far from rosy, but Medicare trustees are pointing to a slightly improved financial picture for the future of the program's trust fund, and they are no longer incorporating savings from the flawed sustainable growth rate (SGR) in their projections.
According to an article in Modern Healthcare (free access after sign-on), the Part A hospital insurance trust fund is now projected to be depleted by 2030, 4 years later than last year's projections. In 2012, the insolvency date was projected to be 2024. Medicare spending is projected to rise from 3.5% of GDP to 5.5% in the next 25 years.
As part of its projection process, the trustees used figures that did not incorporate cuts achieved through the SGR, assuming instead that Congress would replace the cuts with annual .6% raises. Congress has created workarounds to avoid cuts required for the flawed SGR every year since its inception, and in 2013 came very close to ending the SGR permanently. APTA and many other health care organizations have long opposed the SGR.
The trustee report attributes the improved projections to savings realized under the Patient Protection and Affordable Care Act, but warns that ultimately the program will run out of money. Trustee Robert Reischauer is quoted in the Modern Healthcare story as saying that Medicare is "fiscally unsustainable over the long run."
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