Law Will Extend Medicare Fund, Report Says

[ProSense]

Law Will Extend Medicare Fund, Report Says

By JACKIE CALMES

WASHINGTON — Medicare will remain financially solvent for 12 years longer than projected a year ago — until 2029 — because of the cost-cutting measures in President Obama’s recently enacted health care legislation, the program’s trustees reported on Thursday.

Social Security’s long-term finances also stand to improve slightly, the report said, though in the short run the retirement program’s condition has worsened because of high unemployment, which has reduced payroll tax revenues.

Both programs continue to face intense financial pressure in coming decades as the population ages and health care costs rise. Medicare, in particular, faces eventual insolvency if more is not done to balance its obligations to provide health care coverage to the elderly with the tax revenues that pay for the program.

Medicare’s hospital insurance trust fund should remain solvent until 2029, or 12 years more than projected in last year’s report, the trustees said. The long-term, 75-year shortfall for the hospital fund also is reduced, as are the projected costs of the separate Medicare Supplementary Insurance program. But both parts of the Medicare system will require additional reforms to be financially sustainable, the trustees say.

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