Medicare to remain solvent until 2026

The Medicare Trustees released its annual report May 31 and projected that the Medicare Hospital Insurance Trust fund will remain solvent two years longer than last year’s projection, or until 2026.

“The Medicare Hospital Insurance trust fund is projected to be solvent for longer, which is good news for beneficiaries,” said Marilyn Tavenner, administrator of the Centers for Medicare & Medicaid Services (CMS), in a release. “Thanks to the Affordable Care Act, we are taking important steps to improve the delivery of care for seniors with Medicare. These reforms aim to reduce spending while improving the quality of care, and are an important down payment on solving Medicare’s long term financial issues.”

The trustees attributed longer projected solvency to lower-than-expected Part A spending in 2012 and lower projected Medicare Advantage program costs.

CMS referred to data from the Medicare Advantage program that show Affordable Care Act (ACA) provisions will help curb spending growth. However, reduced tax revenue will offset the lower spending projections, according to CMS.

“From 2010 to 2012, Medicare spending per beneficiary grew at 1.7 percent annually, more slowly than the average rate of growth in the Consumer Price Index, and substantially more slowly than the per capita rate of growth in the economy," CMS said. CMS projected a growth rate slower than overall economic growth and credited ACA cost controls.

The report provided a preliminary estimate which holds the Part B premium for 2014 at the 2013 rate.