Friday, March 28, 2008

Medicare's Hospital Trust Fund Will Be Insolvent by 2019, According to Trustees Report

The Medicare hospital insurance trust fund will become insolvent by 2019, the estimate given last year, according to a report released on Tuesday by the board of trustees for Medicare and Social Security, the New York Times reports (Pear, New York Times, 3/26). The trustees projected that Medicare spending will increase from 3.2% of gross domestic product in 2007 to 10.8% in 2082, which is slightly less than trustees predicted last year (Wayne, CQ Today, 3/25).

Medicare Funding Warning The trustees also issued a "Medicare funding warning," which will require the next president to propose a plan to reduce the program's use of general tax revenues, CQ Today reports. Under the 2003 Medicare law, the funding warning is triggered when trustees estimate for two consecutive years that federal general fund revenue will finance more than 45% of total program costs within seven years. In response to last year's warning, President Bush proposed a plan that would require higher-income beneficiaries to contribute higher Medicare premiums and limit awards in medical malpractice lawsuits. The proposal has been introduced in the House and Senate, but the bills are not expected to advance, according to CQ Today (CQ Today, 3/25).

Source Kaiser Daily Health Policy Report

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