Medicare Will Run Out of Money Five Years Earlier

The Hill reports:

Medicare will run out of money five years earlier than previously estimated because of the slowing economy, the program's trustees said in their annual report Friday.

By 2024, the trust fund that pays for seniors’ hospital stays will be paying out more money than it takes in, the trustees warned. Social Security is projected to reach that imbalance in 2036.

The costs of Medicare and Social Security “are not sustainable … and will require legislative corrections,” the trustees said.

The Obama administration said the report shows the need for major reforms to reform both programs, while crediting the new healthcare reform law for extending the life of Medicare.

“Having the Affordable Care Act in place is the main reason that those projections are not worse,” Health and Human Services Secretary Kathleen Sebelius said at a news conference Friday. “What the trustees’ report shows is that the Affordable Care Act has put Medicare on a much more sustainable path.”

The trust fund only pays for certain Medicare benefits, mostly related to hospital care. Total Medicare costs will be about 25 percent lower than they would have been without healthcare reform, according to the report. But Medicare spending is still expected to rise dramatically.