Perspective               

Trustees Report on Medicare's Financial Outlook

The Medicare trust fund that finances doctors' and other medical services under Medicare Part B will see rising costs, but is structured to remain solvent through federal funding and patient premiums and coinsurance, according to the annual report issued by Medicare's trustees in March. And even though the trustees predict that the Medicare Part A hospital insurance trust fund will be exhausted in 2026, four years earlier than expected, consumer advocates have long believed that the debate over Medicare's solvency is a red herring.

Bruce Vladeck, a Mount Sinai School of Medicine health policy professor and former administrator of the Medicare program, supports that notion. He said that the accuracy of trustee projections is often limited and noted that "the difference between 2026 and 2030 does not make any practical difference." It is also worth noting that the Part A trust fund is in better health now than it has been for most of the past 30 years. For example, for much of the 1990s, the trust fund was predicted to remain solvent for little more than 10 years. It is now predicted to remain solvent for 23 years.

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