Medicares trust fund is expected to be exhausted in 2017, two years earlier than previously estimated, according to the 2009 annual report released by the Medicare trustees. In 2008, total Medicare expenditures were $468 billion and are expected to increase in future years at a faster pace than either workers earnings or the economy overall, the report stated.
Its clear that Medicares financial challenges are larger and more imminent than those of Social Security, Treasury Secretary Timothy Geithner said at a news conference. Medicares annual costs were 3.2% of the gross domestic product in 2008, or nearly three-quarters of Social Securitys, but are projected to surpass Social Security expenditures in 2028 and to reach 11.4% of GDP in 2083 compared with 5.9% for Social Security.
Geithner, along with HHS Secretary Kathleen Sebelius, indicated that reform efforts were under way to strengthen the Medicare program and improve the long-term fiscal outlook of the federal government. President Barack Obamas plan to fight fraud and abuse in the Medicare program is a measure that will help keep costs in check, Sebelius said.
A recent pledge by healthcare industry leaders to adopt measures that would shave roughly $2 trillion in healthcare costs over 10 years is another effort that will complement the presidents efforts to enact comprehensive reform, Geithner said.