Thursday, October 31, 2013

Countdown to Medicare insolvency 2013

I finally got around to hitting the highlights of Medicare's 2013 Trustees report. The good news is that the report projects trust fund exhaustion two years later than last year's Hospital Insurance (HI) exhaustion date of 2024. The new date is 2026. Tax increases on high earners of an extra 0.9% increased income significantly. The fact that high income levels are unindexed at $200k for individuals and $250k for families means that inflation will drive more and more people into this new tax bracket. It buys some time, two whole years, to readjust to a sustainable formula. Hopefully we're going to have better luck doing so than in the past. We've got 13 years at present speed until things get very bad. That's plus or minus 7 years by my observation so if things go bad, Medicare could go pear shaped very soon.