U.S. Medicare to remain solvent until 2029: report

08:57, August 06, 2010      

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Medicare, the U.S. government's health program for the elderly and disabled, will remain solvent until 2029, 12 years longer than was projected last year, a government report showed Thursday.

This extension of the fiscal life of Medicare was all because of the healthcare reform bill that President Barack Obama signed into law in March, the program's board of trustees said in its annual forecast.

"The Affordable Care Act has dramatically improved projected Medicare finances," Treasury Secretary Timothy Geithner said in a statement.

The healthcare law is expected to save 145 billion U.S. dollars over a decade through payment cuts to Medicare Advantage, which is private insurance for the elderly, while another 205 billion dollars will be saved as the result of lower payments to Medicare providers, according to the latest official figures.

The trustees' report maintained its forecast for the fiscal life of Social Security, the retirement income program for people over 65.

Social Security will run short of money to pay full benefits in 2037, the same as was projected last year, but its short-term outlook somewhat worsened due to the severe economic recession, said the report.

"The recession has, however, somewhat worsened Social Security' s very near term outlook. Benefit payments are expected to exceed tax revenue for the first time this year, six years earlier than was projected last year," Geithner noted.

"But the improving economy is expected to result in rough balance between Social Security taxes and expenditures for several years before the retirement of the baby boom generation swells the beneficiary population and causes deficits to grow rapidly," he added.

Source: Xinhua


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