USA. Annual Medicare Report

Citation

(2003), "USA. Annual Medicare Report", International Journal of Health Care Quality Assurance, Vol. 16 No. 4. https://doi.org/10.1108/ijhcqa.2003.06216dab.010

USA. Annual Medicare Report

USA

Annual Medicare Report

Keywords: Hospital admissions, Medicare, Health care

In March the Medicare trustees delivered their annual reports on the fiscal health of Medicare. They announced that the financial outlook has declined from last year's estimate, due to lower-than-expected revenues and higher-than-expected hospital spending in 2002.

The trustees estimate that the Hospital Insurance Trust Fund will remain solvent until the year 2026, based on the most probable economic and demographic assumptions. This is four years earlier than estimated in last year's report. The change was due in part to a downward revision by the Bureau of Economic Analysis in wages resulting in lower taxable payroll. Hospital expenditures increased about 2 per cent more than estimated, primarily as a result of higher in-patient hospital admissions and a faster increase in the average complexity of these admissions.

At the same time, the trustees reported that long-term projections of the fiscal health of the HI fund have worsened. The reasons for the decline are based largely on the steady increases in projected health-care costs as well as the growing number of Medicare beneficiaries due to the retirement of the baby boom generation. Today, there are about four workers for every Medicare beneficiary. By 2077, there will be only about two workers for every beneficiary. The report also projects rapidly increasing costs in the Supplementary Medical Insurance (SMI) Trust Fund, which covers physician visits and other outpatient services.

The trustees called for changes to address long-term fiscal problems facing Medicare.

HHS Secretary, Tommy G. Thompson, said: "The time has come to modernize and improve the Medicare program. The President's recently-released Medicare framework provides the kinds of choices and benefits our beneficiaries need, including prescription drug coverage. At the same time, it makes the best use of today's modern health care delivery methods to encourage better quality and more affordable care while beginning to address Medicare's long-term financial challenges. This approach will help us protect Medicare for today's seniors and tomorrow's retirees."

Further information: the Medicare reports are available on-line at: www.cms.hhs.gov/publications/trusteesreport/