Medicare not so broke? Not so fast, says analyst

Tuesday, June 4, 2013
 | 
Chris Woodward (OneNewsNow.com)

A policy analyst says a new report stating the federal Medicare trust fund has another two years before running out of cash is "meaningless."

According to the Medicare trustees report, the Medicare trust fund will run dry in 2026 - which is two years later than previously thought.

Villarreal

Pam Villarreal, a financial expert at the National Center for Policy Analysis, explains that the Medicare funds cited in the report pay seniors' hospital bills. But the money is actually put into the general revenue fund, not used for actual medical bills, she says.

"So we still have the trust fund as part of a liability, as part of an unfunded obligation," she tells OneNewsNow. "So, really, this is meaningless."

Villarreal says the same could be said about the Social Security trust fund, which is still running out of money in 2033.

Meanwhile, the Obama administration welcomes the news of a stronger Medicare, and says the Patient Protection and Affordable Care Act is helping.

"Well, here's the problem with that," Villarreal says. "The cuts in Medicare are based on obviously the assumption that all of the cuts are going to go through under the Affordable Care Act."

Villarreal says one thing being assumed is that Medicare Advantage will experience cuts even though millions of seniors are on the plan. Another assumption is that physicians will experience rate cuts, even though Villarreal says rate cuts have been averted in the past or put in at a much lower rate than planned.

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