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WASHINGTON (AP) — The annual checkup of the government’s big benefit programs for the elderly show that the Obama administration’s sweeping health care overhaul will extend the life of the Medicare hospital insurance fund by 12 years.
But officials cautioned Thursday that the dramatic gain, reflected in the annual trustees report for Medicare and Social Security, will depend on achieving significant savings in health care in coming years.
The report found that the Medicare Hospital trust fund will not be exhausted until 2029, 12 years longer than officials estimated last year.
That improvement was credited to the cost savings that will occur with the passage earlier this year of the controversial health care reform package.
The trustees said, however, that the country’s recession had made the outlook for the Social Security trust fund worse in the near term, however.
They 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.”
The administration delayed issuance of the trustees report, which normally comes out in the spring, in order to recalculate projected spending estimates based on the changes the new health care law brought about or will bring about in the future.
Treasury Secretary Timothy Geithner, the head of the trustees panel, said that while the new report showed “very positive developments” from the new health care law it also underscored “that we must continue to make progress addressing the financing challenges” facing both Medicare and Social Security.
The trustees report also said that Social Security pension and disability payments will exceed revenues for this year and 2011, reflecting a deep recession which has knocked millions of people off payrolls, which means they are not making Social Security payments.
The report said the program would return to the black in 2012 through 2014 but that benefit payments will again exceed tax collections in 2015.
For every year after 2015, the report projects that Social Security will be paying out more than it receives in tax collections under the impact of the retirements of 78 million baby boomers.