Medicare Solvency Report Found Too Optimistic

Kaiser Health News /The Fiscal Times (8/6, Andrews) noted that in a new report, Medicare "trustees predicted that the new healthcare law could generate so much better productivity that the Medicare trust fund would stay solvent until 2029 -- 12 years longer than predicted just one year ago," yet the "new estimates offer few clues about where that new efficiency will come from. They are simply based on the fact that the new healthcare law requires that Medicare payments to hospitals and doctors will be adjusted to reflect higher productivity." In fact, HHS Secretary Kathleen Sebelius acknowledged, "The report shows that we have work left to do. ... To achieve the gains projected in this report, we must continue to work hard with our partners across the country to implement the reforms in the Affordable Care Act effectively and on time."
Similarly, CQ HealthBeat (8/7, Reichard, subscription required) reported, "If Thursday's report by the Medicare board of trustees on the program's financial outlook seemed too optimistic, a presentation Friday by Centers for Medicare and Medicaid Services (CMS) Chief Actuary Richard Foster offered what may be a more realistic assessment." Notably, the "trustees said Thursday that about $575 billion over 10 years in Medicare savings generated by the healthcare overhaul would improve its financial outlook and help extend the solvency of the Medicare hospital trust fund from 2017 to 2029." Yet, "Foster told a forum sponsored by the American Enterprise Institute (AEI) that none of the experts with whom he has consulted think that the modest yearly payment increases the law provides for hospitals and other providers are realistic."