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Report says no change in Medicare's solvency

by Loren Bonner, DOTmed News Online Editor | April 24, 2012
Medicare trustees released their annual report, which finds that "As in past years, the trustees have determined that the fund is not adequately financed over the next 10 years."

The Medicare Trustees Report predicts that the program's Hospital Insurance Trust Fund will begin to run out of money starting in 2024, the same prediction that was made last year.

In this year's report, trustees emphasized the overall outlook for Medicare, which includes nearly 50 million seniors and disabled Americans. The report said that Medicare's short term and long term costs would rise slightly higher than previously reported.

Unless Congress passes an alternative cost-cutting plan, the report assumes that Medicare's costs would be offset by 2 percent cuts to the program agreed to in last year's deficit reduction agreement. Additionally, the forecast is based on the notion that the U.S. Supreme Court will not overturn President Obama's healthcare reform law. That ruling is expected to be handed down in June.

The report also says that the financial projections for Medicare are uncertain because current provisions in the law that are designed to reduce costs may not hold up. The report assumes that CMS will implement a reduction in payment rates for Medicare doctors of more than 30 percent beginning in 2013. But Congress is almost certain to override this, just as it has in years past.

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