Medicare to run out of money five years earlier, trustees say

Medicare will run out of money five years earlier than previously estimated because of the slowing economy, the program's trustees said in their annual report Friday.

The trust fund that pays for seniors' hospital stays will run out of money by 2024 under current projections, the trustees warned. And Social Security will go broke in 2036 if nothing is done.

Republicans immediately jumped on the latest numbers to make the case for comprehensive reforms and spending cuts. 

"Today's report makes it clearer than ever that doing nothing is not an option," Ways and Means Chairman Dave Camp (R-Mich.), Health Subcommittee Chairman Wally Herger (R-Calif.) and Social Security Subcommittee Chairman Sam Johnson (R-Texas) said in a joint statement. "The failure to act means current, as well as future beneficiaries, will face significant cuts even sooner than previously estimated.  We call on the President and all of our colleagues in the House and Senate to act now and take the long overdue steps to strengthen these vital programs.  It's what Americans expect of us, it's what taxpayers demand and it's what our children deserve."

House Budget Committee Chairman Paul Ryan (R-Wis.) said the report shows the need to enact Medicare reforms like those in his 2012 budget, which would eventually transform Medicare into a type of voucher system.

"Today’s report yet again highlights the urgent need to save and strengthen our critical health and retirement security programs," he said in a statement. "Rather than allow opponents of reform to allow Medicare to collapse, the House-passed budget saves Medicare, making no changes for those 55 and older and offering future generations a strengthened, personalized Medicare program they can count on.

"It also stops the raid on the Medicare trust funds – ensuring that Medicare savings go toward saving Medicare, not creating a brand new entitlement. We must also work together to advance bipartisan solutions to strengthen Social Security, which is what our budget requires," Ryan added.

Check back on Healthwatch soon for updates.

Erik Wasson contributed to this report. It is cross-posted from Healthwatch.