WASHINGTON -- Medicare is in better shape because of President Barack Obama's sweeping health care overhaul and will stay afloat a dozen years longer than earlier projected, trustees forecast Thursday. But that depends on cuts in care that the system's top analyst says are highly doubtful.
The annual report by the trustees who oversee Medicare and Social Security, led by Treasury Secretary Timothy Geithner, gives backers of the new health care law evidence of a positive impact on government entitlement programs, but it also undercuts the findings with a host of caveats.
Top Medicare actuary Richard Foster warned that the report's financial projections "do not represent a reasonable expectation" for the hospital fund for America's elderly.
Kathleen Sebelius, secretary of health and human services and one of the trustees, said they were required to assume current law in making their projections, including a cut in Medicare payments to doctors. She, too, doubted the cuts ever would happen.
The trustees projected the Medicare hospital trust fund would be exhausted in 2029, or 12 years later than estimated last year.
The news wasn't as rosy for Social Security, which will pay out more in benefits than it collects in taxes for the first time in decades this year and next year. The Social Security trust funds are expected to be exhausted in 2037.
More bad news for Social Security recipients: The trustees project no cost-of-living increase for Social Security recipients next year, the second year in a row with no increase.
The nonpartisan experts said there are two big reasons for their estimate of higher costs:
--The trustees' report assumes that doctors will absorb a 30 percent cut in Medicare payments over the next three years. The cuts are called for under current law but routinely are waived by Congress.
--Projected savings in the new health care law from cuts to hospitals, nursing home and other institutional providers will prove to be politically unsustainable in the long run.