* Main Medicare fund seen lasting into 2030
* Disability insurance fund could run dry in 2016
(Adds comments by trustees, officials and background)
By Jason Lange and David Morgan
WASHINGTON, July 28 Tamer spending at U.S.
hospitals and expected savings from President Barack Obama's
healthcare overhaul are shoring up the funding outlook for the
Medicare program for the elderly, trustees of the program said
Medicare's trust fund for hospital bills will run out of
money in 2030, four years later than previously estimated, the
trustees said in a report. The trustees, however, reiterated a
warning that the Social Security program would run out of money
to fully pay disability benefits by 2016 and could not meet all
of its obligations on pensions after 2033.
The report gives mixed messages about the urgency of
reforming America's biggest social welfare programs, which
together make up about 40 percent of federal spending.
While the arrival date for Medicare's crunch has been pushed
into the future, an aging population is already stressing the
finances of programs that provide income for the disabled.
"The long-term picture this year looks very similar to last
year's report. The short-term picture has grown more urgent,"
Charles Blahous, the lone Republican on the board of trustees,
said at a news conference.
U.S. Treasury Secretary Jack Lew, who is one of the
trustees, said the disability program could be temporarily
patched up by Congress redirecting revenues from another Social
Security fund. That would buy time to work out a long-term
solution, he said.
A partisan divide in Washington has made major reforms of
Medicare and Social Security appear nigh impossible in recent
years. Republicans want to rein in government spending, while
Lew said Obama will not support any proposal that hits current
beneficiaries or that slashes benefits for future retirees.
The trustees said the Medicare hospital fund would last
longer than previously thought because "expenditures in 2013
were significantly lower than the previous estimate." They said
it wasn't clear how much of the slowdown was because of a weak
economy and how much was due to Obama's healthcare overhaul,
which is expanding insurance coverage. Nevertheless, the
trustees said they expected "substantial" savings from
The trustees said congressional action was still needed to
address long-term solvency in Medicare and Social Security.
"The sooner the policymakers address these challenges, the
less disruptive the unavoidable adjustments will be," said
trustee Robert Reischauer, a former director of the
Congressional Budget Office.
The report's conclusions largely mirrored those made earlier
this month by the nonpartisan CBO, which also pushed back to
2030 its projection of when Medicare's main trust fund would be
Depletion of the Medicare and Social Security trust funds
does not mean that all benefits would stop. At the current rate
of payroll tax collections, for example, Medicare would be able
to pay about 85 percent of costs in 2030.
Social Security would be able to pay about 80 percent of
disability benefits starting in "late 2016," the Treasury
Department said in a statement.
(Reporting by Jason Lange and David Morgan; Editing by Andrea
Ricci and Cynthia Osterman)