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July 29, 2014      1:13 PM

New numbers bring cautious optimism on solvency of Medicare

Government has no conclusive idea why costs are down

WASHINGTON DC – Projections the solvency of the Medicare trust fund has been extended an additional four years elicited reactions from experts that ranged from “cautious optimism to enthusiastic pessimism,” according to the panel moderator of a discussion at the American Enterprise Institute on Tuesday.

The 2014 Medicare Trustees Report pushed the solvency of the Medicare trust fund from 2024 to 2030 in a single year, a fact that chief actuary Paul Spitalnic attributed to slower growth in claims and spending. Even a fractional decrease in ratios between collections and spending, and the ability to build additional modest assets, has significant impact on the fund’s 75-year horizon.

“This has changed the completion of the fund from 2026 to 2030, but it’s hard to look at this chart as wonderful news,” Spitalnic told an audience at AEI. “It’s clearly better news than we had last year, but there’s still clearly a problem with (Hospital Insurance Trust Fund) financing.”

By Kimberly Reeves