The Medicare hospital trust fund is now projected to run out of money in 2024--five years sooner than originally projected, according to a status report compiled by the Medicare trustees.
The deterioration of the trust fund's finances is directly linked to the sluggish economic recovery, according to the trustees, which reported that payroll tax revenues were "considerably lower than projected" and that the general economy was also weaker than expected.
The report was immediately seized on by policymakers and political leaders on both sides of the aisles for political advantage.
House Speaker John Boehner (R-Ohio) said the report required immediate action. "The biggest threat Medicare faces right now is the status quo," he said, according to the New York Times. "The trustees' report makes it clear that if we do nothing, Medicare will not be able to pay promised benefits to American seniors."
However, U.S. Department of Health and Human Services Secretary Kathleen Sebelius noted that the financial savings in the Patient Protection and Affordable Care Act staved off the trust fund's insolvency as recently as 2016.
Although a Republican proposal recently was floated to turn Medicare into a voucher program, it generally is believed that neither political party will do anything to ensure that Medicare eventually becomes insolvent.
For more information:
- read a summary of the trustees' status report
- here's the actual report (.pdf)
- check out the New York Times article
- here's the Associated Press piece