Health law, boon or bust for Medicare?

The Patient Protection and Affordable Care Act should give the Medicare trust funds an additional 12 years before they are exhausted in 2029, according to the annual report of the trustees for Medicare and Social Security.

The report noted that although the expenses of the Hospital Insurance (HI) Trust Fund are expected to exceed its income for several years, "the savings under the new health reform act are expected to result in fund surpluses during 2014-2022."

Still, the trustees said additional actions were needed to ensure short- and long-term financial "adequacy" of the Medicare trusts. "We believe that solutions can and must be found to ensure the financial integrity of HI and reduce the rate of growth of Medicare costs, building on the strong measures as part of the Affordable Care Act."

That trustee's claims drew immediate condemnation from Republicans and their allies, who noted that the trustees were counting on savings from health reform that were far from assured, a calculation that the trustees acknowledged as well.

House minority leader John Boehner (R., Ohio) said, "The Trustees' report confirms that Medicare's future now rests on Washington Democrats' accounting gimmicks and tricks, a risk America's seniors are by no means eager to take."

And Cato Institute senior fellow Mike Tanner said, "The illusion of increased solvency is created by counting hypothetical future savings from the health care law – debatable themselves – as both increasing the size of the trust fund and financing the health care law."

How the health law impacts Medicare is particularly important for both sides of the partisan divide in Washington as a recent Kaiser Family Foundation poll shows. Although half of the respondents to Kaiser's July tracking poll were strongly favorable or somewhat favorable toward the new federal health law, 46 percent of seniors held unfavorable views of the statute compared with 38 who held a favorable view of it.

Click here to download a complete PDF of the 289-page report.

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