The part of the Medicare Trust Fund that covers hospital inpatient care -- Part A -- will remain solvent until 2020, one year more than forecasted a year ago, according to a new estimate from the Medicare Board of Trustees. Part B, which covers physician and outpatient care, and Part D, which will cover the new drug benefit, remain adequately funded for the future, according to the new estimates.
The one-year improvement in the outlook for Part A funding is attributed to slight increases in payroll tax and other income for 2004 and the projected future.
Still, spending is projected to outpace income and the long-term prognosis for Part A remains gloomy because of projected increases in healthcare spending and in the number of Medicare beneficiaries.
The total spending on Medicare is projected to increase from 2.6% of gross domestic product currently to 13.6% by 2079. By 2024, Medicare spending will surpass spending for Social Security and by 2079 spending for the program will nearly double that for Social Security.