Sunday, May 7, 2006
The Medicare Hospital Insurance Trust Fund will become insolvent in 2018, based on current cost and population trends, two years earlier than predicted last year, according to the Social Security and Medicare trustees annual report. Inside the Beltway, the response to this news seems to split along (gasp!) party lines, with Republicans calling for cuts in benefits and Democratic party leaders speculating whether the report is a GOP scare tactic designed to drum up support for the President's going-nowhere-fast program to reform Social Security. Joseph Antos at the American Enterprise Institute has a very helpful analysis of the concept of "insolvency" as it applies to the two Medicare trust funds, in the course of which he basically says we should ignore the trustee's estimate of the year the Medicare HI Trust Fund won't be able to meet its obligations.