As Our Parents Age

Medicare Trust Fund Projections: What it All Means to Me

Solvency Projections of the Medicare Hospital Insurance Trust Fund, 1970-2011

Older Americans and their adult children can be frightened or at least puzzled by the annual reports of the Medicare Trustees. Each year a report makes financial projections for the fund that pays for senior health care expenses (Medicare). Almost every year some politicians spin dire scenarios about the “certain” near bankruptcy of Medicare. The  image at the right illustrates a less certain outcome — showing that annual trustee projections vary widely and are highly unstable over time.

While it’s true that all of us are going to pay more for our Medicare benefits because, no matter what we are paying now, in today’s world most of us live longer and pay in far less than the amount we will use in benefits. (See my post Does Part D Stand for Deficit? that describes how much I am putting in and how much I may get out in benefits.) This graph on the right illustrates  that over the last 40 years, annual solvency projections vary widely. From this graphic, plotted by the Kaiser Family Foundation and using 40 years of annual reports, one can conclude that the state of the economy plays a big role in the predictions made by the report.

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May 28, 2011 Posted by Marti Weston | aging parents, cost of medical care, health care campaign claims, Medicare, Senior Health | Annual report, bankruptcy, Health insurance, Kaiser Family Foundation, Medicare, medicare part D | Leave a Comment