Trustees: Medicare about 22% short

The trustees noted that Congress requires them to assume that Congress will allow implementation of several controversial Medicare budget-cutting measures, including a “sustainable growth rate” (SGR) law enacted in 1997 that is supposed to hold increases in Medicare physician pay rates to the same level as the rate of growth of the U.S. gross domestic product (GDP).

Congress has moved year after to year to keep the budget-cutting measures from taking effect.

In “illustrative alternative projections” that assume Congress will continue to keep the budget-cutting measures from taking effect, the latest actuarial balance figure is a deficit equal to 2.17 percent of the 2013-2087 taxable payroll total.

That “alternative projections” actuarial balance deficit is down from 2.43 percent a year ago.

Actuaries at Milliman estimated recently that, in April, another type of post-retirement benefits mechanism — traditional defined-benefit pension plans at the 100 largest companies — had a 18.8 percent gap between the market value of the assets in the plans and the assets needed to fund the $1.7 trillion in projected benefits obligations, up from 17.1 percent a year earlier.

At the Medicare Part A fund, the biggest source of improvement in the actuarial balance was data suggesting that Medicare enrollees will end up being a little healthier and making a little less use of skill nursing facility care than than the data used a year ago suggested, the trustees said.

Successful efforts to hold down Medicare Advantage plan spending could help, too., the trustees said.

“In this year’s report, the Medicare Advantage plan bid assumptions were lowered to  reflect recent data suggesting that certain provisions of the [Patient Protection and Affordable Care Act (PPACA)] will reduce growth in these costs by  more than was previously projected,” the trustees said. “The impact on the  actuarial balance of this assumption change and other  minor changes is +0.07 percent of taxable payroll.”

See also:

• Actuaries: Medicare Trust Fund Looks Awful
• Rating Agencies Eye U.S. Government, Japanese Life Insurers
• Medicare Trustees: Don’t Believe Our Numbers