The Medicare Trustees Report confirms what we already know to be true: Medicare is not in crisis. The trustees find that the Medicare Hospital Insurance (Part A) Trust Fund is solvent through 2026—two years later than reported last year.
The HI Trust Fund will be able to pay on Medicare Part A inpatient claims in full for the next 13 years, and the Supplemental Medical Insurance (Part B and Part D) trust fund remains on firm financial footing, ensuring full payment for outpatient care and prescription drug needs.
This good news affirms that policymakers have time to test and expand value-driven delivery system and payment reforms designed to improve health care quality while simultaneously driving down the cost of care. The Affordable Care Act (ACA) offers a blueprint for these reforms, and testing of many promising reforms is already underway. Medicare is the incubator for these innovations.
The trustees’ findings reinforce that there is no justification for cutting benefits or shifting costs to people with Medicare. Half of all beneficiaries—25 million older adults and people with disabilities—live on annual incomes of $22,500 or less. Further, the average Medicare household already spends 15 percent of its annual income on health care costs, three times that of non-Medicare households.
Short-sighted approaches that shift costs to people with Medicare will not only harm people with Medicare, forcing many to forgo needed care, but will also achieve only short-term savings. Instead, policymakers must focus on the long-term challenges facing our health care system overall. Transforming how we pay for health care services is the right path forward—both for the public and private health insurance market. Continued testing of these reforms in Medicare will pave the way.
