I read this informative online KFF.org article by Juliette Cubanski and Tricia Neuman regarding 10 Essential Facts About Medicare’s Financial Outlook and thought I’d share it.
The article explains Medicare funding, the Affordable Care Act’s impact on Medicare’s long term financial stability, and what an aging population means for Medicare going forward. It goes on to say that Medicare is likely to be back on the federal policy agenda as Congress debates repealing & replacing the Affordable Care Act, and also if policymakers turn their attention to reducing entitlement spending as part of efforts to reduce the growing federal budget deficit and debt.1
1. Medicare is not “going broke” even though it does face financial challenges.1
When some policymakers talk about Medicare as being “bankrupt” or “going broke” they are referring to the status (or “solvency”) of Medicare’s Hospital Insurance (Part A) trust fund, out of which beneficiaries’ hospital bills are paid. When spending on benefits exceeds revenues (primarily payroll taxes), and assets in the trust fund account are fully depleted, Medicare will not have sufficient funds to pay all Part A benefits. Currently, Medicare’s actuaries estimate that there will be sufficient funds available to pay for hospital insurance benefits in full until 2028. At that point, Medicare will be able to cover 87% of costs covered under Part A through payroll tax revenues - but the Medicare program will not cease to operate.1
2. The aging of the U.S. population, along with higher health care costs, are contributing to the growth in Medicare spending over time.1
Between 2010 and 2050, the population ages 65 and older will double…1
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3. The Affordable Care Act (ACA) helped to reduce Medicare spending growth in the years following its enactment.1
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4. Repealing the ACA, including all Medicare provisions, would increase Medicare spending.1
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5. Medicare spending was 15 percent of the federal budget in 2016.1
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6. Medicare spending is projected to increase gradually as a share of the federal budget and the nation’s economy over the next 10 years.1
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7. Medicare spending is projected to increase at a faster rate in the coming years than in the five years following enactment of the ACA.1
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8. Spending on Part D prescription drug coverage is expected to grow faster than spending on other Medicare-covered benefits over the next 10 years.1
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9. Medicare spending is projected to increase as a share of the economy over the long run, but the ACA helped to moderate the long-range projections.1
To read entire article for details, please use Web link below towards bottom of article.
10. Medicare benefits are funded mainly by a combination of general revenues, payroll taxes, and premiums paid by beneficiaries.1
To read entire article for details, please use Web link below towards bottom of article.
Click on web link below to read entire article:
http://kff.org/medicare/issue-brief/10-essential-facts-about-medicares-financial-outlook/
1. Source: Kaiser Family Foundation - http://kff.org/medicare/issue-brief/10-essential-facts-about-medicares-financial-outlook/
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