Medicare solvency gets two-year reprieve

Slower rates of spending have extended the lease on the life of the Medicare Trust Fund, the Washington Post reported.

The fund's trustees reported late last week that Medicare is expected to operate financially unimpaired until the year 2026. That's compared to the 2024 insolvency date for the Hospital Insurance Trust Fund that came out of last year's report.

Once that date is reached, providers--including hospitals--will not receive full payments for services.

According to MedPage Today, the trust fund's extended solvency is credited by a slowdown in the rate of healthcare spending, particularly among some hospital services such as skilled nursing units, as well as cuts from the recent sequester. The report is also assuming that the spending slowdown will be continued by the enactment of most of the features of the Affordable Care Act starting next year.

"What we're finding is that there's a significant transformation of the private and public sector in terms of how payments are made," Health & Human Services Secretary Kathleen Sebelius said at a news conference. She is among the Medicare program's trustees.

Yet the relatively optimistic assessment has raised concerns among some industry observers that tackling Medicare's long-term fiscal issues will be put off.

"To me, that's the real loss of all this good news," Paul B. Ginsburg, president of the Washington-based Center for Studying Health System Change, told the Washington Post. "I don't think anyone except the most extreme person, seeing these trends, thinks the [Medicare] cost problem has been solved. But the way politicians are, it does tend to take the pressure off."

To learn more:
- read the Washington Post article
- read the MedPage Today article
- check out the Medicare report (.pdf)