In Annual Report, Medicare Trustees Project Program to Remain Solvent Through 2028
June 24, 2016 08:31 AM
The Medicare Trustees on June 22 released their annual report for 2016, which projected that the Medicare trust fund will remain solvent through 2028. This is two years earlier than predicted in last year’s report but 11 years later than projected in 2009 before the passage of the Affordable Care Act. In positive news, Medicare spending did not increase enough to trigger the Independent Payment Advisory Board (IPAB) in 2016. However, the report predicts that IPAB will be triggered in 2017, the same year as predicted in last year’s report.
“Per-Medicare beneficiary cost growth continues to be exceptionally low,” said Andy Slavitt, acting administrator of the Centers for Medicare & Medicaid Services (CMS). “For more than five decades, Medicare has provided financial security and accessible health care to millions. With growing numbers of Americans relying on Medicare, it’s our job to continue the hard work to strengthen Medicare and the health care system as a whole.”
Per-enrollee Medicare spending growth averaged 1.4 percent over the last five years, slower than GDP per capita (2.9 percent) and overall health expenditures per capita (3.4 percent). Over the next decade, per-enrollee Medicare spending growth (4.3 percent) is expected to continue to be lower than the growth in overall per capita national health expenditures (4.9 percent). Total Medicare spending is projected to grow at a faster annual rate of 6.9 percent average over the next decade, due to the growth of the over-65 population.
The report projects a small increase in Part B premiums for about 70 percent of Medicare beneficiaries due to the potential for a small Social Security cost-of-living adjustment. The “hold harmless provision” under federal law protects 70 percent of Medicare beneficiaries from any Medicare premium increase that exceeds the annual increase in an individual’s Social Security benefit. In a press release, CMS noted that this projection is based on preliminary data and that the final Social Security cost-of-living adjustment will be announced in the fall based on updated data along with the 2017 Medicare Part B premiums later in the year.
The National Association for Home Care & Hospice (NAHC) strongly opposes IPAB and recommends that Congress repeal it. Based on the way it was structured, the Board with little oversight would likely be forced to make Medicare cuts that would harm patients and providers.
The report’s findings provide further evidence against any proposed Medicare cuts affecting home health or hospice or proposals to institute copayments. NAHC will continue to make the case against proposed changes to Medicare that would harm home health or hospice agencies.
The 2016 Medicare Trustees Report is available here.