Medicare Trustees Release 2011 Report

If not for the Affordable Care Act (ACA), the Medicare Hospital Insurance (HI) Trust Fund would run a deficit eight years earlier than currently projected, according to the Social Security and Medicare Trustees report released last week. The report states that the HI Trust Fund is expected to become insolvent in 2024, five years earlier than projected in the 2010 report. This is largely the result of the economic downturn. The HI Trust Fund is funded through payroll taxes, and if fewer individuals are paying into the system, there will be less HI funds available. The trustees also stated that Medicare costs will continue to grow from about 3.6 percent of the economy in 2010 to about 5.6 percent in 2035. However, this growth rate is influenced by the growth of cost in the health care system overall in the United States. Many proposals that would cut Medicare by shifting extra costs to consumers would not address the underlying causes of Medicare cost growth or health care cost growth overall.

The report also addresses the financial health of Medicare Part B, which covers outpatient services such as doctor visits, and Medicare Part D, which provides coverage for prescription drugs. Because these parts of the program are funded through a combination of general revenues and premiums that are adjusted each year, they are for the most part self-sustaining and are projected to remain balanced, as they have been in past years.

Medicare trustees release annual reports to Congress on the status of the Medicare programs. Four of the six trustees are appointed by virtue of their position in government: the Secretary of the Treasury, Secretary of Labor, the Secretary of Health and Human Services, and the Commissioner of Social Security. The remaining two are public representatives appointed by the president.

Statement by Medicare Rights Center President Joe Baker on the Medicare Trustees Report.

Read the CMS press release and the 2011 Medicare Trustees Report.