Washington Medicare is in better shape because of President Barack Obama’s sweeping health care overhaul and will stay afloat a dozen years longer than earlier projected, trustees forecast Thursday. But that depends on cuts in care that the system’s top analyst says are highly doubtful.
The annual report by the trustees who oversee Medicare and Social Security, led by Treasury Secretary Timothy Geithner, gives backers of the new health care law evidence of a positive impact on government entitlement programs, but it also undercuts the findings with a host of caveats.
In what amounted to a dissenting opinion, top Medicare actuary Richard Foster warned that the report’s financial projections “do not represent a reasonable expectation” for the hospital fund for America’s elderly.
Kathleen Sebelius, secretary of health and human services and one of the trustees, said they were required to assume current law in making their projections, including a cut in Medicare payments to doctors. She, too, doubted the cuts would ever happen, “which is why we continue to provide cautionary notes” in the report.
The trustees projected the Medicare Hospital trust fund would be exhausted in 2029, or 12 years later than estimated last year.
The news wasn’t as rosy for Social Security, which will pay out more in benefits than it collects in taxes for the first time in decades this year and next year. The Social Security trust funds are expected to be exhausted in 2037, the same date as in last year’s report.
More bad news for Social Security recipients: The trustees project no cost-of-living increase for Social Security recipients next year, the second year in a row with no increase. The adjustments are based on inflation.