Medicare Could Be Exhausted in ‘93, Study Finds

Social Security will be solvent well into the 21st Century, but Medicare, America’s health insurance system for the elderly, is ailing and could be exhausted in 1993, an Administration report said Monday.

“Early corrective action is essential in order to avoid the need for later, potentially precipitous changes,” the report said, urging that “Congress take early remedial measures to bring future . . . program costs and financing into balance.”

The annual study from the Social Security Board of Trustees said the Social Security fund should enjoy about three decades of actuarial surpluses and remain in balance for about 75 years.

Because of the healthy state of the nation’s economy and a transfer of money from the Treasury, the study said the trust fund grew more rapidly last year than had been expected and its ability “to withstand temporary economic downturns has improved significantly.”

Cites Health Costs

However, the report said the outlook for Medicare was bleak by comparison, due mostly to rising health costs. There has been talk in Congress of creating a bipartisan panel to examine an overhaul of the system, similar to the body that studied Social Security several years ago.

The report used several sets of assumptions in projecting the future health of the Medicare system.

“Under the more optimistic set of assumptions, the trust fund is projected to remain solvent throughout the first 25-year projection period,” the report said. “Under the more pessimistic set of assumptions, the trust fund is projected to increase to a level of about 76% in 1988 and then decrease rapidly until the fund is exhausted in 1993.”