Excerpted from Tuesday's Chicago Tribune.
Every year, Medicare trustees deliver an impenetrable report that answers a single headline-worthy question: How soon will Medicare run out of money? Last year, the trustees estimated that one part of Medicare would be insolvent alarmingly soon -- 2017. But then came the new health care law, sold to Americans as a way to reduce costs and shore up Medicare. The trustees released a new report last week that said Medicare had 12 more years. That is, the Medicare hospital trust fund would run out of money in 2029 instead of 2017. Treasury Secretary Tim Geithner declared that "the outlook for Medicare has improved substantially because of program changes" made by the new law. But Democrats weren't straight with Americans about the costs of health care reform before the law passed. And they're still fuzzing over facts. One gimmick: double count the savings. The Democrats crow that the new law wrings $575 billion from Medicare projected costs, via savings and tax increases, to extend the program's solvency. But that money isn't going directly to Medicare. Congress is plowing it into the expansion of benefits under the new law.
The trustees' report comes with a surprise twist from Medicare's chief actuary, Richard Foster. In a capsule, he says: Never mind. The rosy projections are fiscal fantasyland. The trustees are required by law to appraise Medicare based on certain assumptions. But they bear little resemblance to the real world in doctors' offices and hospitals. Those assumptions, Foster writes, "do not represent a reasonable expectation for actual program operations in either the short range ... or the long range."
There's a long way to go before health care reform fully kicks in by 2014. Congress still must funnel billions to create state exchanges and fund subsidies for many Americans to buy insurance. The law won't be repealed, but it's looking awfully likely that it will face some big changes.