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Under current law, the Medicare Hospital Insurance fund would be exhausted by 2024.

Welcome to VoteFacts.   Usually we start our posts out with something along the lines of "there is a lot of talk about...".  But today, we are bringing up an important subject that does not seem to be discussed enough yet, which is the projected exhaustion date of the Medicare trust fund, specifically the Hospital Insurance (HI) trust fund, and what that would mean for seniors.  People are going to want to be armed with Medicare facts as this election cycle heats up.  Here are bullet points on this subject to help you get focused on facts:

First, when is Medicare expected to become exhausted?

• Under current law - including the provisions of the new health care law - the balance of the Medicare Hospital Insurance (HI) trust fund will be exhausted in 2022, CBO Projects.  CBO, Page 126

• According to CMS, the estimated exhaustion date for the Medicare HI trust fund remains at 2024, the same year shown in last year's report. As in past years, the Trustees have determined that the fund is not adequately financed over the next 10 years.  CMS, Page 6

• A commonly used measure of the Medicare program's sustainability is the trust fund's exhaustion date. Once the Hospital Insurance (HI) trust fund is exhausted, the Centers for Medicare and Medicaid Services will no longer have legal authority to pay health plans and providers.  Annual outlays would therefore be limited to annual revenues.  CBO, Page 49

Once the Medicare HI trust fund is exhausted, it appears that total payments to health plans and providers for services covered under Part A of Medicare would be limited to the amount of revenues subsequently credited to the trust fund. If that occurred, beneficiaries' access to health care services would almost certainly be reduced.  CBO, Page 62

How do those exhaustion dates compared to what we faced if the new health care law had not been passed?  Here is what the CMS said:

• The assets of the Hospital Insurance trust fund would have been exhausted in 2017 under the prior law.  CMS, Page 9

Had the law not been passed, exhaustion was projected to be 2017, with the law it is projected to be 2022 to 2024.  It looks like we're in for a lot more Medicare reform folks, and the important thing is, what will those reforms look like and which ones will actually preserve Medicare for younger generations who are paying into it today.

Later, we'll ask readers to focus on facts and then decide whether an exhausted Medicare trust fund and the continued spending reductions that are necessary to stave it off are less painful to future beneficiaries than receiving means tested vouchers, because Medicare as we have always known it became an impossibility the moment we realized that it faced $38 trillion dollars in unfunded liabilities.  But for today, having taken some time to focus on the facts, head up and cast your vote.

Note:  "Means testing" means that the amount you get is based on income, with lower incomes receiving more and higher incomes receiving less.

VoteFacts original post date:  August 30, 2012

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Under current law, will the Medicare HI fund be exhausted by 2024?
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Voting Key

Fact = 100% - 92% True
Mostly Fact = 91% - 75% True
Slightly Fact = 74% - 60% True
Split = 59% - 50% True
Slightly Fiction = 49% - 30% True
Mostly Fiction = 29% - 10% True
Fiction = 9% - 0% True