Despite many years of bipartisan support, Medicare has become a contentious partisan issue in recent years – Republicans have fought to eliminate the program and replace it with a voucher system in which seniors would get coupons they’d use to buy private insurance, while Democrats have pursued far more modest fiscal reforms. Both agree, however, on one thing: Medicare faces long-term fiscal challenges that will eventually need a remedy.
The obvious question, of course, is how soon that solution will be necessary. Last year, Medicare’s trustees said fiscal troubles would begin for the program in 2024. This morning, the trustees pushed that deadline back by two years.
The Medicare Hospital Insurance fund will exhaust its assets in 2026, two years later than projected last year and the assets in the Social Security funds will be depleted in 2033, the same date the trustees predicted in last year’s report.
The trustees explained that the pushing back of the trust funds exhaustion date for Medicare’s hospital insurance program is due partly to lower projected spending in the future for skilled nursing facilities and other services.
In an encouraging note for President Obama, the trustees said recent data suggest that certain parts of the Affordable Care Act will reduce growth in medical care costs “by more than was previously projected.”
With congressional Republicans loath to even consider compromises or bipartisan reforms, Medicare’s extended solvency is certainly good news. Indeed, the White House can take a fair amount of credit for this – the Affordable Care Act has slowed Medicare spending and improved savings throughout the system.
Indeed, one of the great ironies of last year’s political campaigns was Republican arguments about the need to “put back” the funds Obamacare “cut” from Medicare. Whether GOP candidates realized this or not, what they were talking about was undoing cost savings – their plan was to make Medicare more insolvent sooner.
In fairness, it’s worth emphasizing that trustees’ reports often vary with the economy, and healthier economic times leads to healthier reports for the social-insurance programs. With that in mind, the administration can’t point to the Affordable Care Act as the sole reason for Medicare’s improved fiscal conditions.
But the health care reform law has helped Medicare’s financial footing. Those pushing to gut or repeal the law are putting the solvency of the program at greater risk.