Today’s hearing on the 2011 Medicare Trustees report reinforces what has long been widely acknowledged: Action must be taken to prevent Medicare from reaching its rapidly approaching insolvency and collapsing.
- The trustees currently predict the Medicare Hospital Insurance (HI) trust fund will go bankrupt in 2024, five years earlier than they estimated in last year’s report.
- Medicare’s unfunded liabilities total $24.6 trillion under the current law baseline.
- If Congress does what the trustees expect and reverses cuts called for by the Democrats’ health care law and prevents cuts to Medicare physician payment rates, Medicare spending will grow from 3.6 percent of Gross Domestic Product (GDP) in 2010 to roughly 10.7 percent of GDP in 2085.
- The long-range financial imbalance of the HI trust fund could be addressed by immediately increasing the payroll tax by 24 percent or,
- By an immediate 17 percent cut in expenditures (by reducing benefits or cutting provider payments).
The Medicare Trustees say Medicare’s financial woes are understated and action must be taken sooner, rather than later. Congress and the Obama Administration must work together to ensure that Medicare will continue to serve America’s seniors for generations to come.