Medicare in Good Health – for Now

Medicare is in much better health and has a somewhat longer life expectancy than previously expected, according to the 2014 Medicare Trustee’s report released today.

medicare-pillSpending on Medicare’s Part B program, which covers mainly doctors’ services and outpatient care, has significantly slowed, the report says. That’s good news for the 59 million people on Medicare, because it means that the standard Part B premiums, which are always pegged to the previous year’s costs, are expected to stay at the same level in 2015 as they were in 2013 and 2014 – $104.90 a month.

The costs of Medicare’s other side, the Part A hospital insurance program, are also lower than previously projected, leading to a revised estimate of how long it will take the program to run out of funds to cover all costs. Last year’s trustees report set the date at 2026. Now it’s been pushed back a further four years, to 2030.

>> Read where AARP stands

Still, the prognosis is one of only guarded optimism. “Some may be tempted to conclude that Medicare may be healing its financial maladies all by itself, and that no further action would be needed,” trustee Robert Reischauer said at the report’s unveiling at the Treasury Department. “That would not be a prudent conclusion to reach.” And while describing the program as “fundamentally secure,” Treasury Secretary Jack Lew warned that “manageable adjustments should be made now rather than drastic changes later.”

The reasons for Medicare’s lower costs are not precisely known, but experts point to changes introduced by the 2010 Affordable Care Act, designed to make Medicare more efficient; the sharp drop in hospital readmissions as a result of regulation; and some blockbuster prescription drugs now replaced by less-expensive generic versions.

While lower costs are hopeful, it isn’t clear how long the trend will continue. Medicare actuaries expect spending to rise again in future years, at least in part because of high enrollments from the boomer generation, who are now becoming eligible for Medicare at a rate of 10,000 a day.

In recent years, Medicare has become a hot political potato, with many cost-saving proposals put forward in Congress but not acted upon.

“Some in Washington still hold on to the mistaken belief that cutting benefits or asking seniors to pay more is the best way to address Medicare’s financial challenges,” AARP Executive Vice President Nancy LeaMond responded to the report, “even though a typical senior has an annual income of just $20,000 and already pays thousands of dollars in out-of-pocket health care costs.” She added that “common sense changes” – such as better coordination of care, clamping down on high drug prices, and more efforts to weed out waste and fraud – would improve care and ensure Medicare’s longevity for today’s and future generations.

6 comments
critterma
critterma 5pts

Key words for Medicare ADMITTED TO HOSPITAL OR UNDER OBSERVATION, very important , VERY IMPORTANT!

critterma
critterma 5pts

In March, my 90 year old Dad fell and did a fracture on his hip that didn't require surgery. He was in the hospital for 5 days before a bed was found near his home in a rehab.nursing facility. The came the shock! Medicare does not pay for rehab on the broken hip unless the patient was admitted (surgery or something more dire than a broken hip on a 90 year old veteran, 2 times wounded in WWII) , does this sound fair?


They told him to get out his checkbook, for more than $10,000 that he had to pay for the rehab for the 6 weeks he was there, getting himself to meals and to his room. $229 / day for 6 weeks.


Medicare has this LITTLE LOOPHOLE, no surgery, we won't pay They were only in the hospital in a bed, getting attention per their injury, UNDER OBSERVATION! That requires no Medicare obligation.. It seems that it's been going on for many years, using up seniors savings, putting them into financial crisis, then when they are drained of their savings , they can go on Medicaid, where their Social Security is "used for  their care, and they will get about $50 / month for their personal use while in the rehab, then,if they get out, they have to go on welfare because all their life savings are gone! 

Is this fair?  Don't believe it? Research it then plaster your Congressperson to make a reform on this outrageous practice through Medicare. We have appealed my Dad's case, just got it started, wish us luck!

2Papa
2Papa 5pts

Medicare will eventually be replaced with Obamacare.  Mark my word.

HerbFarr
HerbFarr 5pts

AARP is a very poor advocate for seniors.  When Clinton raised the taxability of Social Security from 50% to 85%, AARP said nothing.  When Obamacare cut Medicare benefits, AARP supported Obamacare.  When Obama raised Medicare premiums, AARP said nothing.

myexper
myexper 5pts

Medicare's health will become terminal if Republicans control Congress and the Presidency. The Ryan Republican budget, passed by the Republican controlled House, would have eliminated traditional Medicare. Fortunately, the Democrat majority Senate voted down the despicable Republican budget which would kill our traditional Medicare. But If the Repubs control it all, your traditional Medicare will no longer exist.

myexper
myexper 5pts

@HerbFarr 

Obamacare never cut Medicare benefits.


Medicare beneficiaries as a group are required to pay one-fourth the cost of running Medicare, and annual premiums are set at a figure calculated to achieve that level of revenue ..... nothing to do with Obama.