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1 1 (July 2018)

handle is hein.amenin/aeiaart0001 and id is 1 raw text is: The 2018 Medicare Trustees Report: Fiscal and Policy Challenges By Joseph Antos and Robert Emmet Moffit July 2018 Medicare's financial outlook has deteriorated in the past year, according to the latest annual report by the program's trustees. The Medicare Hospital Insurance trust fund is projected to be depleted in 2026, three years earlier than estimated in last year's report. That understates the policy challenge. Every year, the program relies more on general revenues to cover its costs. In total, Medicare will receive $324 billion in general revenues this year. That will more than double by 2026. Prompt action is needed to put Medicare on a sound financial footing. The ongoing public debate on the future of the American health system has focused on the challenges of making health insurance available and affordable for everyone. Largely overlooked in this debate is the fiscal threat facing the Medicare program resulting from an aging population, an increasing ability to treat disease, and the rising cost of treatment. The recently released 2018 Annual Report of the Medicare Board of Trustees reminds us that a lack of heated debate over the future of Medicare does not mean the program is secure. The report finds that total Medicare costs will grow rapidly over the next two decades as the large baby-boom generation ages into the program, leading to long-term financial shortfalls (Boards of Trustees 2018). It is vitally important for the public and policy- makers to clearly understand that policies to address those shortfalls should be adopted as soon as possible. The trustees argue that more immediate action would permit consideration of a broader range of solutions and provide more time to phase in changes so that the public has adequate time to prepare (Social Security and Medicare Boards of Trustees 2018). The Medicare trustees have given similar warnings in annual reports over the past five decades, but policymakers have typically not responded quickly or consistently. Medicare's Fiscal Condition This year's trustees report warns us once again that Medicare is living on borrowed time. The trustees estimate that Medicare's Hospital Insurance (HI or Part A) trust fund will be depleted in 2026, three years earlier than projected last year. That date is widely reported in the press because it is the least technical (and most understandable) indicator of Medicare's fiscal status, but it tells only part of the story. Outlays for the Supplementary Medical Insurance (SMI) trust fund, which pays for physician and outpatient services (under Medicare Part B) as well as prescription drugs (under Medicare Part D), are growing even faster than spending for inpatient care. Over the next 75 years, Medicare faces $37-7 trillion in liabilities that are not paid for through payroll and other taxes, beneficiary premiums, or other revenue sources specifically dedicated to the program (Boards

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