The Medicare Trust Fund was initially projected to end by 2026 but the new projection said that it has been extended until 2028.
The Centers for Medicare and Medicaid Services had released its annual report today posted in its website showing good news and improvement.
The extension made on the health care program was said to be a result of the reduction on the expenses for most hospital services and the Affordable Care Act, better known as the Obamacare, implemented since Mach 2010.
The members of the board were positive that the trim down in health expenditures was not a result of the ongoing recession.
Their analysis revealed that both the private and public sector changed how they pay their health services which caused a large change in the numbers. Each sector reorganized their health policies and put up care organizations to ensure that the costs were managed more efficiently and to decrease the expenses as well.
The board looked at the health spending of the public sector for them to gauge if it the changes were affected by the recession. They have observed a slow down. Medicare spending usually grows at least 1.7 percent every year but 2012 record showed that it went down by 2 percent. The slowdown is expected to continue until 2017.
Medicare had been involved in several controversies including the usage of new technologies and introduction of new prescription drugs which directly affects health spending.
So what is the impact of the Medicare Trust Fund two-year extension? It simply means that the Hospital Insurance Trust Fund, a health insurance program for people age 65 years and older and disable people, will have enough budget to cover for the expenses. Once the trust fund is exhausted, payroll taxes will cover only up to 87 percent of the hospital expenses in 2033 and eventually reduce to 70 percent by 2050. The remaining percentage will be covered by the patient out of his pocket.
