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NEWS JULY 27, 2020 ¦ 17

COVID-19
Has Medicare Bleeding Funds

By Julie Rovner, Kaiser Health News

Everyone involved
even tangentially
in health care
today is completely
consumed by the coro-
navirus pandemic, as
they should be. But
the pandemic is accel-
erating a problem that
used to be front and
center in health circles:
the impending insol-
vency of Medicare.
With record num-
bers of Americans out
of work, fewer payroll
taxes are rolling in to
fund Medicare spend- There are two ways the Medicare Trust Fund can get into trouble: Either the money flowing
ing, the numbers of in is too little, or the payments going out for care are too much. (Photo: Shutterstock)

beneficiaries are rising, and Congress dipped into So Shulkin, now a senior fellow at the Leon-
Medicare’s reserves to help fund the COVID-19 re- ard Davis Institute of Health Economics at the
lief efforts this spring. University of Pennsylvania, did his own projections.
“I think we have a real, impending health care Given even a conservative estimate of how many
crisis,” said Dr. David Shulkin, who was undersec- workers and businesses would not be contributing
retary for health at the Department of Veterans payroll taxes that finance Part A spending, he said,
Affairs under President Barack Obama for two the trust fund could become insolvent as early as
years and led the VA for a year under Donald 2022 or 2023.
Trump. “I think this is something that needs more imme-
In April, Medicare’s trustees reported that the Part diate attention,” he said.
A Trust Fund, which pays for hospital and other Others who make projections agree the insolven-
inpatient care, would start to run out of money in cy date is getting closer, maybe not as close as 2022.
2026. That is the same as the projection in 2019. But The Committee for a Responsible Federal Budget,
the trustees cautioned at the time that their projec- a nonpartisan group of budget experts focused on
tions did not include the impact of COVID-19 on fiscal policy, estimates that the pandemic will cause
the trust fund. the Part A Trust Fund to be unable to pay all of its
“Given the uncertainty associated with these im- bills starting in late 2023 or early 2024. “But we’re
pacts, the Trustees believe that it is not possible to still very close,” said Marc Goldwein, the group’s se-
adjust the estimates accurately at this time,” said the nior vice president.
report.
¦ Continued on PAGE 18

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