MEDICARE SOLVENCY: Math Error Leads to Underestimate
The future for Medicare solvency looks a little brighter, according to trustees of the program who discovered that a computational error had underestimated the date when the program would run short of cash to pay benefits, the AP/Nando Times reports. Although a report issued last month estimated that the program would run short of cash in 2023, trustees now believe that Medicare will remain solvent until 2025. In a memo to House Minority Leader Richard Gephardt (D-Mo.), HHS Chief Actuary Richard Foster said that although a more refined methodology for projecting the program's financial future was used for the March 30 report, a programming mistake resulted in an error in interest earnings projections. Foster said, "This error resulted in a substantial underestimate of future interest income and caused the estimated year of exhaustion for the (Medicare Hospital Insurance) trust fund to be shown as 2023, instead of the correct date of 2025." Currently HHS and the Treasury Department are working to correct the problem and amend the report (Aversa, 4/20).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.