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Medicare Trustees Annual Report Available

The Social Security and Medicare Trustees’ Annual Report Summary for 2007 is a 20 page summary report that provides an analysis of the current and projected future state of the trust funds established by Congress to pay for Social Security and Medicare.

Below are some excerpts on Medicare that point to the financial challenges ahead that will probably require some combination of tax increase, premium increase, and benefit reduction.

Medicare’s Financial Difficulties

“Medicare’s financial difficulties [will] come sooner, and are much more severe than those confronting Social Security. While both programs face demographic challenges, the impact is greater for Medicare because health care costs increase at older ages. Moreover, underlying health care costs…are projected to rise faster than … wages [and] taxes [on which] … benefits are based.”

Part A: Under-Funded in 12 Years

“The projected date of the Hospital Insurance Trust Fund exhaustion is 2019…when tax income will … pay only 79 percent of … costs.”

Part B & Part D: Solvent, But Premiums Will Rise

“Part B … which pays doctors’ bills and other outpatient expenses, and Part D which pays for … prescription drug coverage are both projected to remain adequately financed into the indefinite future… However, expected steep cost increases will result in … substantial increases … in … premium charges.”

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