The annual Medicare Trustees report found that under current conditions, the Medicare hospital insurance trust fund will be exhausted by 2024, largely due to the bad economy. The same report, which was released Friday, projected that the Social Security trust fund also will be depleted by 2036, a year sooner than what was predicted last year.
The Medicare hospital trust fund pays for such services as inpatient hospital care, limited skilled nursing facility care, hospice care and others. It is funded through payroll taxes; current high unemployment rates moved up the estimated insolvency date. Officials from the Centers for Medicare & Medicaid Services say that without the Affordable Care Act, Medicare would be forecast to have run out of funds by 2016.
According to the trustees who wrote the report, the sooner Congress can take action in reforming Medicare, the less painful it will be in the long run. U.S. Secretary of the Treasury Timothy Geithner, chairman of the trustee panel, said bigger, more difficult adjustments will be required if reform efforts are delayed.
The report’s assessment has given Republicans, who have been calling for significant changes to Medicare, more ammunition to fuel their case. Prior to the report’s release, Senate Minority Leader Mitch McConnell (R-KY), said that he wants to see significant changes to Medicare before he would vote to lift the legal limit on government borrowing. McConnell argues that because Medicare and Medicaid appear to be major drivers for government borrowing, eligibility requirements and benefit reductions must be a part of any deal he makes, The Washington Post reported.