The Affordable Care Act will help Medicare save over $200 billion through 2016, according to government actuaries. But questions as to Medicare’s long-term solvency remain, another report from Social Security and Medicare Boards of Trustees states.
The Centers for Medicare & Medicaid Services announced Monday that more than $200 billion should be saved through 2016, thanks to reform initiatives that aim to end excessive payments to private insurers who offer Medicare Advantage plans, fraud-prevention measures and changes in provider payment policies. The CMS Office of the Actuary provided these estimates. Medicare pays for short-term hospital and nursing home stays.
But a new report by the Social Security and Medicare Boards of Trustees, also issued today, paints a less rosy picture for Medicare’s future. Medicare and Social Security are on their way to becoming insolvent in coming decades as the result of an aging workforce and a slow economic recovery, the trustees say. They are urging Congress to take action soon. The most recent projections would have the Medicare hospital insurance fund for seniors running out of money in 2024 (which is the same date as projected by the trustees a year ago), Social Security’s retirement fund by 2038 and a key disability fund by 2016 (two years faster than last year’s forecast, according to the non-partisan Congressional Budget Office).
Additionally, a Government Accountability Office report also released Monday urged Health and Human Services Secretary Kathleen Sebelius to cancel an $8-billion Medicare Advantage demonstration program that used quality bonuses to improve managed care for seniors. Click here to read the report.