New injection of concern: Medicare Part A to become insolvent in 8 years, report says

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New injection of concern: Medicare Part A to become insolvent in 8 years, report says
New injection of concern: Medicare Part A to become insolvent in 8 years, report says
If current trends continue, the Medicare Part A trust fund will become insolvent in 2017, according to the new annual report from the Social Security and Medicare Boards of Trustees issued Tuesday.

"Medicare's financial difficulties come sooner-and are much more severe-than those confronting Social Security," says the trustees report. "The projected date of HI Trust Fund exhaustion is 2017, two years earlier than in last year's report."

Medicare's Hospital Insurance (HI) Trust Fund helps fund the program, and pays out money for hospital and other medical expenses for the elderly. As recently as 2003, the fund was expected to last until at least 2026. In 2004, the trustees revised that estimate and predicted the fund would run dry in 2019. Late last year, actuaries with the Centers for Medicare & Medicaid Services projected that the program could go broke sometime between 2016 and 2018. (McKnight's, 12/3/08) This year's trustees report bears out that prediction.

Medicare Parts B and D are expected to remain in relatively good shape in the future, the trustees say, since the law currently provides annual funding for those programs. They do predict, however, "that about one quarter of Part B enrollees will be subject to unusually large premium increases in the next two years." They also predict that general revenue financing needs for Parts B and D will grow from 1.3% of gross domestic product in 2008 to 4.7% in 2083.

The report can be found online at http://www.ssa.gov/OACT/TRSUM/index.html
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