Tuesday, December 2, 2008

Economy likely to move up Medicare's insolvency

From WashingtonPost.com

Federal health officials estimate that the struggling economy will speed up by one to three years the exhaustion of the Medicare trust fund covering hospital and nursing home care.Trustees for the Social Security and Medicare programs warned last March that the trust fund for Medicare Part A would become insolvent in 2019. But the chief actuary for Medicare said Monday the economy will likely generate less revenue through payroll taxes than the trustees had projected.
Once the trust fund is exhausted, the federal government will continue to pay for hospital care and other services, but it initially would only have enough money coming in to cover 78 percent of estimated costs.
Trustees issue a once-a-year report on the financial conditions for Social Security and Medicare. In the fall, the trustees get an update that tells them what's happening versus what their latest projection indicated. In the latest update, Medicare's top actuary braced the trustees for a deterioration in Medicare's finances.

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