Medicare's finances are in even worse shape than previously thought, according to an annual report released by its Trustees today. The hospital fund is now slated to run out of coin in 2024, rather than 2029. Politico reports that Treasury Secretary Timothy Geithner explained that the new numbers are a result of "technical changes in the economic assumptions underlying the projections." Translation: The economy still looks as ugly as the home of one of the Garbage Pail Kids, and that, in turn, means the Medicare's finances, which rely on the economy for their health, are more broken—and more broke—than Washington's fiscal minders previously thought.
If anything, though, the Trustees are still overstating the studiness of program's finances, which were "extended" with ObamaCare voodoo money. More from Politico:
In last year's report, the trustees predicted the cost savings and tax increases in the Affordable Care Act would extend the life of the Medicare trust fund for 12 years. At that time, it was expected to run out of money in 2029, rather than 2017. That was a controversial conclusion, since most Republicans think the savings in the law can be used either to extend the life of the trust fund or to pay for the new health care reform programs, but not both.
That conclusion was "controversial," but that's not the word I would use. Instead, I would say it was wrong. As I've noted on multiple occasions, it's not just Republicans who've argued that the administration is double counting: The Congressional Budget Office has said so too:
To describe the full amount of HI [hospital insurance] trust fund savings as both improving the government's ability to pay future Medicare benefits and financing new spending outside of Medicare would essentially double-count a large share of those savings.
And so has Medicare's chief actuary:
In practice the improved (Medicare hospital insurance) financing cannot be simultaneously used to finance other Federal outlays (such as the coverage expansions) and to extend the trust fund, despite the appearance of this result from the respective accounting conventions.
And you know who else agrees with them? Why none other than the Obama administration's Health and Human Services Secretary, Kathleen Sebelius. True, she's tended to stick to the line that ObamaCare made Medicare's finances healthier. But in a congressional hearing this year, she was pressed on the double-counting question. Asked whether ObamaCare's Medicare cuts were "preserving Medicare or funding the health care law," she replied with one word: "Both."
Should you ever trust the headline estimates from an entitlement's trustees? Perhaps not: Last year, Medicare's Board of Trustees essentially warned that maybe you shouldn't believe their own report.