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Follow him on Twitter to keep up with his latest work! To request a reduction in that income-related amount due to a life-changing event like retiring, the Social Security Administration has a form you can fill out. For Part A, which covers inpatient hospital, skilled nursing and some home health-care services, most Medicare beneficiaries do not pay a premium because they have enough of a work history of paying into the system to qualify for it premium-free.
However, there are deductibles that go with Part A. That covers the first 60 days of Medicare-covered inpatient hospital care in a benefit period. The solvency of Medicare in this context is measured by the level of assets in the Part A trust fund. In years when annual income to the trust fund exceeds benefits spending, the asset level increases, and when annual spending exceeds income, the asset level decreases. When spending exceeds income and the assets are fully depleted, Medicare will not have sufficient funds to pay all Part A benefits.
In the Medicare Trustees report, the actuaries projected that the Part A trust fund will be depleted in , the same year as their projection and three years earlier than their projection Figure 8.
The actuaries estimate that Medicare will be able to cover 89 percent of Part A costs from payroll tax revenue in In the and Medicare Trustees reports, the actuaries attributed the earlier depletion date to several factors, including legislative changes enacted since the report that will reduce revenues to the Part A trust fund and increase Part A spending:.
Part B and Part D do not have financing challenges similar to Part A, because both are funded by beneficiary premiums and general revenues that are set annually to match expected outlays. Expected future increases in spending under Part B and Part D, however, will require increases in general revenue funding and higher premiums paid by beneficiaries.
Although Medicare spending is on a slower upward trajectory now than in past decades, total and per capita annual growth rates are trending higher than their historically low levels of the past few years. The aging of the population, growth in Medicare enrollment due to the baby boom generation reaching the age of eligibility, and increases in per capita health care costs are leading to growth in overall Medicare spending.
A number of changes to Medicare have been proposed in the past to address the fiscal challenges posed by the aging of the population and rising health care costs. Lately, policymakers have been focused more narrowly on policy options to control Medicare prescription drug spending , rather than on broader proposals to reduce the growth in Medicare spending.
Meanwhile, Medicare has featured prominently in the presidential campaign, with proposals from some Democratic candidates to expand on it as part of a Medicare-for-all plan , and ideas from others to allow people to buy into it.
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