Medicare Compliance & Reimbursement

Changes implemented by the Affordable Care Act (ACA) allowed Medicare Part A to stay funded longer.

The Centers for Medicare & Medicaid Services (CMS) may have bought itself some extra time before insolvency hits, a May 31 Medicare Trustees’ Report indicates.  Last year’s report predicted Medicare would go broke in 2024, but now the projection pushes the date back two years to 2026 for Medicare Part A.

Part A is set to remain solvent for only another 13 years as its spending is growing faster than taxes coming in. The Part A coffers will be empty by 2026 unless the government takes action, according to the “2013 Annual Report of the Boards of Trustees of the Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds.”

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

ACA Allowed for Additional Part A Funding

Despite the bleak outlook, CMS reps were quick to point out that changes implemented by the Affordable Care Act (ACA) allowed the Medicare program to stay funded longer than previously expected.

“Thanks to the Affordable Care Act, we are taking important steps to improve the delivery of care for seniors with Medicare,” CMS Administrator Marilyn Tavenner said in a May 31 statement. “These reforms aim to reduce spending while improving the quality of care, and are an important down payment on solving Medicare’s long term financial issues.” Between 2010 and 2012, Medicare spending per beneficiary grew at 1.7 percent annually, which was slower than expected.

If Congress takes no action to correct Medicare’s depleting funds, the program will be able to cover just 87 percent of estimated expenditures in 2026, and only 71 percent of projected costs in 2050, CMS notes. “Congress and the executive branch must work closely together with a sense of urgency to address these challenges,” the report states.

To read the Trustees Report in its entirety, visit http://downloads.cms.gov/files/TR2013.pdf .