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Economic Downturn could hasten Medicare Part
A insolvency, Actuary says
[Dec 02, 2008] The economic downturn could
hasten insolvency of the Medicare Part A
trust fund by one year to three years,
Richard Foster, chief actuary for
CMS,
said on Monday, the
AP/Boston Globe reports.
Medicare trustees earlier this year
estimated that the trust fund, used to pay
for hospital and nursing home care for
Medicare beneficiaries, would be insolvent
by 2019.
However, Foster said that the economy this
year likely will generate less revenue
through payroll taxes than anticipated.
Foster said, "Right now, we know that we're
in the start of the recession. We don't yet
know how severe it might be," adding, "We
did a very, very rough estimate suggesting
that because of the recession," Medicare
Part A insolvency could occur between 2016
and 2018.
According to the
AP/Globe,
once the Part A trust fund is exhausted, the
federal government will continue to pay for
inpatient hospital care, nursing home care,
hospice and home health.
However,
the government initially would have enough
money to cover only 78% of estimated costs.
HHS
Secretary Mike Leavitt said, "The more you
anticipate the problem, the better chance
you have of averting disaster," adding,
"That's why the trustees here are
frantically trying to get people's attention
to say you have to start now" (Freking,
AP/Boston Globe,
12/1).
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