Report: Medicare Program To Be Bankrupt By 2019
Trustees Say Social Security In Better Shape
POSTED: Tuesday, March 23, 2004
UPDATED: 2:03 pm EST March 23,
2004
WASHINGTON -- Medicare trustees issued a report Tuesday warning the system will go broke by 2019 without changes.
The report states that Medicare's Hospital Insurance Trust Fund is projected to be exhausted seven years earlier than projected in last year's report.The trustees say the big problem is the swelling cost of a new prescription drug benefit. The existing surplus, built up by taxes on baby boomers, is dwindling just as they start retiring.Medicare will dip into its trust fund this year to meet expenses, after last year's report projected that wouldn't have to happen until 2013.But the new Medicare Modernization Act accounts for only two years of the seven-year difference in solvency dates. The new law includes many reforms that will enable Medicare to improve its financial outlook, according to the Department of Health and Human Services.The report also indicates the Social Security trust fund is in better shape than Medicare. It's expected to become insolvent in 2042, about the same time reported last year. The system will begin paying out more benefits than what's collected through payroll taxes in 2018.
Discuss: How Should Medicare Be Changed?
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Distributed by Internet Broadcasting Systems, Inc. The Associated Press contributed to this report. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
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