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Medicare trust fund will stretch until 2030, new projections say

Sarah Kliff, Vox.com, 7/28/14

Slow health cost growth has improved Medicare's financial outlook, extending the program's trust fund to last until 2030.

The 2014 Medicare Trustees Report projects that, if absolutely nothing changes, the trust fund that pays for most of seniors' hospital visits will now last an additional four years beyond the 2013 forecast. A four-year slowdown in health care costs means that the exact same amount of Medicare funding can now stretch those few years longer.

The health spending slowdown has had a noted impact on Medicare spending. Per person spending in the program, for example, has grown at an average of 0.8 percent over the past four years — much slower than the overall economy, which grew at an average annual pace of 3.1 percent.

This does not mean that Medicare is set to bankrupt in 2030, as this report's projected date of insolvency is often read — more on that point here. You can also read the full Trustees' report here.

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