Medicare Financial Outlook Worsens

The Medicare board of trustees' annual report to Congress warned Medicare's hospital insurance trust fund could be depleted by 2026, three years earlier than forecast last year, reports Kaiser Health News . One government official cited several factors that are shrinking funding and causing spending to spike, including reduced wages for several years, which adds up to lower payroll taxes. Meanwhile, the recently-passed tax cut means there will be fewer Social Security taxes paid into the hospital trust fund, as some higher-income seniors pay taxes on their Social Security benefits. In addition, the senior population's growth is straining Medicare funds, while maneuvers by the Trump administration and Congress to rescind two provisions of the Affordable Care Act (ACA) also are threatening the program's future. Those moves include repealing the penalties for people who lack insurance and the elimination of an independent board charged with regulating spending if certain financial thresholds are reached. Marc Goldwein with the Committee for a Responsible Federal Budget said the change to the ACA's individual mandate penalties, which takes effect in 2019, will likely leave millions more uninsured, burdening hospitals with higher rates of uncompensated care. The Kaiser Family Foundation's Juliette Cubanksi noted the board's report signals that Medicare Part A will only be able to pay 91 percent of covered benefits starting in 2026.