The Affordable Care Act actually strengthened the near-term outlook of the Part A trust fund. The law includes a 0.9 percent payroll tax that hits the wages and self-employment income of wealthier Americans — above $250,000 per couple or $200,000 for a single taxpayer. That was estimated to raise an additional $63 billion for the Part A trust fund between 2010 and 2019. The law also was estimated to cut expenses, including $162 billion in productivity adjustments to provider payments and $86 billion in reduced payments to Medicare Advantage plans.
The net result was that the “insolvency” date was extended by 12 years . Before the law was passed, the trustees said in 2009, the fund was going to be depleted in 2017. “The short-range financial outlook for the HI [hospital insurance] trust fund is substantially more favorable than projected in last year’s annual report, primarily as a result of the Affordable Care Act,” the Medicare trustees said in their 2010 report, saying the fund would last until 2029.
In the 2016 trustees report, the fund was estimated to be depleted in 2028, two years earlier than the 2015 report, primarily because the consumer price index, representing inflation, did not rise as much as anticipated, reducing income projections. (In the long run, however, lower inflation will also reduce Medicare expenditures.) But that’s unrelated to the Affordable Care Act.
In fact, Republicans have vowed to repeal Obamacare, which would in turn make the trust fund’s situation instantly worse unless lawmakers found a way to make up the payroll tax revenue and program savings embedded in the Affordable Care Act.
the House speaker really went off the rails when he said on national television that Obamacare is making the program go broke. That’s the exact opposite of what happened.
(Excerpted from Fact Checker, Washington Post 11/14/16)