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Modern Healthcare - - Ed­i­to­rial -

MEDI­CARE FACES IN­SOL­VENCY SOONER / The Medi­care trust fund will be ex­hausted in 2024, five years sooner than ear­lier pre­dicted.

Medi­care’s trust fund will be ex­hausted in 2024, ac­cord­ing to a re­port from the So­cial Se­cu­rity and Medi­care boards of trustees. The new in­sol­vency date is five years ear­lier than trustees pre­dicted in 2010, a re­sult trustees blamed on re­duced Medi­care tax re­ceipts and ris­ing pay for providers. Obama ad­min­is­tra­tion of­fi­cials re­sponded to the re­port by high­light­ing the ef­fects of the Pa­tient Pro­tec­tion and Af­ford­able Care Act, which they cred­ited with low­er­ing fu­ture Medi­care spend­ing by 25%. “Hav­ing the ACA in place is the main rea­son th­ese pro­jec­tions are not worse,” HHS Sec­re­tary Kathleen Se­be­lius said at a news con­fer­ence. If the hos­pi­tal trust fund is ex­hausted, an ad­min­is­tra­tion of­fi­cial said, it would de­lay provider pay­ments un­til ad­di­tional tax rev­enue was re­ceived or al­low pay­ment of only por­tions of provider bills. Separately, Medi­care spend­ing on physi­cians and drugs, which is paid for by gen­eral tax rev­enue, is ex­pected to nearly dou­ble as a per­cent­age of gross do­mes­tic prod­uct over the next 25 years, ac­cord­ing to the re­port. How­ever, that es­ti­mate is based on a 29.5% physi­cian re­im­burse­ment cut go­ing into ef­fect at the end of this year, which an ad­min­is­tra­tion of­fi­cial said is “not very re­al­is­tic.”

GETTY IM­AGES

Trea­sury Sec­re­tary Tim Gei­th­ner, far left, lis­tens dur­ing a news con­fer­ence about the re­port.

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