Report: Medicare fund extended 12 years

August 6, 2010 at 12:00a.m.

Associated Press

WASHINGTON

A report on the financial condition of the Medicare and Social Security programs contends the Obama administration’s sweeping health-care overhaul will extend the life of the Medicare hospital-insurance fund by 12 years — an assertion that Medicare’s top numbers-cruncher disputed.

The report acknowledged in its own right that the brighter outlook for Medicare assumes achievement of significant savings in health care, a scenario critics argue is highly questionable. And in what amounted to a dissenting opinion, top Medicare actuary Richard Foster warned that the report’s financial projections “do not represent a reasonable expectation.”

The conflicting renderings by federal officials centered on the annual report of the trustees for Medicare and Social Security, released Thursday. It found that the Medicare Hospital trust fund will not be exhausted until 2029, 12 years longer than estimated last year.

The recession, however, has worsened the near-term outlook for the Social Security trust fund, the report said.

The trustees said the Social Security program is projected to pay out more in benefits than it collects in taxes for the first time this year and next year. The Social Security trust fund is expected to be exhausted in 2037, the same date as in last year’s report.

The report noted that achieving the health-care savings needed to extend the life of the Medicare trust fund “may prove difficult and will probably require that payment and health-care delivery systems be made more efficient than they are currently.”