Home Health & Hospice Week

The latest Medicare Trustees’ Report released last month offers some good news and bad news for the future of Medicare Part A. The bad news is that Part A is set to remain solvent for only another 16 years, until 2030. The good news is that last year’s report indicated Medicare would go broke in 2026, which means that CMS has slowed spending and therefore apparently figured out how to stretch a dollar a bit further.

Nevertheless, Part A spending is growing faster than taxes are coming in to pay for the program, and the Part A coffers will be empty by 2030 unless the government takes action, according to the Trustees Report.

Part B and Part D accounts “are adequately financed because premium and general revenue income are reset each year to cover expected costs,” the report explains. “Such financing, however, would have to increase faster than the economy to match expected expenditure growth.”

Despite the bleak outlook, CMS reps were quick to point out that changes implemented over the past year are allowing the Medicare program to stay funded longer than previously expected. “The Medicare Hospital Insurance trust fund is projected to be solvent for longer, which is good news for beneficiaries and taxpayers,” says CMS Administrator Marilyn Tavenner. “Thanks to the Affordable Care Act, we are taking important steps to improve the quality of care for Medicare beneficiaries, while improving Medicare’s long-term solvency. Specific-ally, we have made major progress in improving patient safety, decreasing hospital readmissions, and establishing new payment models such as accountable care organizations aimed at reducing costs and improving quality.”

If Congress takes no action to correct Medi-care’s depleting funds, the program will be able to cover just 85 percent of estimated expenditures in 2030, and only 75 percent of projected costs in 2050, CMS notes. “Policy makers should determine effective solutions to the long-range hospital insurance financial imbalance,” the report states.

The Trustees Report is at www.cms.hhs.gov/ReportsTrustFunds/downloads/tr2014.pdf.