Medicare's hospital trust fund gained two years of solvency in the latest federal projections, but it is not clear why.
Friday's annual report of the Social Security and Medicare trustees delayed the bad news for the Hospital Insurance Trust Fund to 2026, two years later than they expected last year.
The change was credited to lower-than-expected growth in Medicare expenses, including lower bids from Medicare Advantage insurers and less use of skilled-nursing facilities last year.
The greater-thank-expected Medicare Advantage savings stemmed from provisions of the Patient Protection and Affordable Care Act.
Reduced spending on skilled-nursing facilities provided the “vast majority” of the $3.6 billion drop in what the trust fund paid out in 2012 compared with last year's projection, said a senior administration official speaking on condition of anonymity.
But the White House could not explain the decline in utilization. Among the possible reasons are that hospitals are retaining patients longer or discharging patients directly into the community, said Juliette Cubanski, a policy analyst at the Kaiser Family Foundation. “Or it could be a one-year statistical anomaly that we won't see again,” she said.