On Friday, the Medicare Trustees released their annual report, which projects the solvency of the Medicare program. According to the Trustees, the Medicare Part A program will remain solvent until 2026 — two years later than the trustees projected last year. (Additional information on the 2012 Medicare Trustees’ Report is available here.)
The report presents a non-partisan snapshot of the state of the Medicare program, but also contains a wealth of interesting information about the overall Medicare program, such as:
- In 2012, Medicare covered 50.7 million people – 42.1 million of whom were age 65 or older and 8.5 million of whom have disabilities.
- In 2012 Medicare spent $574.2 billion and received $536.9 billion. Since 2008, Medicare has been spending more than it is taking in, but is able to meet its financial obligations because it is using funds available in the trust fund (estimated to be $287.6 billion).
- The Medicare Trustees project that Medicare will become insolvent in 2026, at which time Medicare will be spending more than it is receiving in revenues. Interestingly, the Trustees project the Medicare program will continue to run a deficit until 2014, and between 2015 and 2014 the program will run a surplus, after which it will return to a deficit.
- Most Medicare beneficiaries (about 73 percent) are enrolled in “traditional Medicare” – in other words, the sign up for Medicare Part A and B. More than one quarter (27 percent) of Medicare beneficiaries are enrolled in Medicare Advantage (MA) – a private plans that deliver Medicare benefits. In 2012, the Trustees estimated that 25 percent of beneficiaries were enrolled in MA. This is interesting in part because there was concern that the Affordable Care Act’s (ACA) changes to the Medicare Advantage (MA) payment rates would result decreased enrollment in MA plans. Today’s Trustees’ report suggests that concern is not being realized (at least in the short term).
- Most Medicare beneficiaries are also enrolled in Medicare Part B, which primarily pays for services provided by physicians and other health care professionals. Currently most beneficiaries pay $104.90 per month for their Part B premium. Each year the Centers for Medicare & Medicaid Services (CMS) calculates the amount of the Part B premium. However, the Trustees project that the Part B premium will not increase next year.
It is also important to note that in making their projections, the Medicare Trustees have to assume current law. Thus, if Congress were to make further changes – like addressing the impending SGR cuts (more information available here – then that would have an impact on the Trustees’ projections.
More information on the Medicare Trustees, including past reports, is available here.