woman in hospital

Predictions of Medicare Part A Running Out of Funds By 2026 Leaves SNFs in The Red By 2040

Full coverage of Medicare Part A benefits is said to be at risk within seven years as funding begins to run out. This could potentially lead to long-term effects that will be devastating to a large number of nursing homes and those who operate them, as well as the healthcare system as a whole.

Generally, Medicare Part A is responsible for covering inpatient care in a hospital, skilled nursing facility care, hospice care, and through home health care programs. Medicare is based on the laws set by the state and federal government, and it is up to national and local decision-makers to set the coverage standards.

The Hospital Insurance (HI) Trust Fund directly supports Medicare Part A benefits, which include skilled nursing services and facilities. This fund will only have the means to help provide these benefits up until 2026, according to the findings of the Medicare Board of Trustees. These are the same findings recorded last year and display a serious potential for a decline in spending on skilled nurses.

“HI income is projected to be lower than last year’s estimates due to lower payroll taxes and lower income from the taxation of Social Security benefits,”, concluded the trustees. They added, “HI expenditures are projected to be slightly higher throughout the short-range period because of higher-than-projected 2018 spending and higher projected provider payment updates, factors that are mostly offset by the effect of lower assumed utilization of skilled nursing facility services.”

The HI funds have not been given considered a stable long-term system that officials could have faith in since before 2004. Following two years in a row of surpluses, the HI funds went back into a deficit in 2018. According to the Medicare board, the fund will lose money for the next 75 years.

“Notwithstanding recent favorable developments, current-law projections indicate that Medicare still faces a substantial financial shortfall that will need to be addressed with further legislation,”, the trustees continued to comment. They added, “Such legislation should be enacted sooner rather than later to minimize the impact on beneficiaries, providers, and taxpayers.”

In recent projections, by 2040 two-thirds of skilled nursing facilities (SNFs) as well as 80% of home health agencies will reflect negative balance sheets. This could lead to a number of quality-of-care issues when it comes to those that depend on Medicare benefits.

There is news of a proposed increase that hopes to bring $887 million more to Medicare funding from a 2.5% market-basket bump for skilled nursing care, but this is not a permanent solution for long-term Medicare financial stability. Medicaid reimbursement is only half of the total income made by SNF’s since Medicare Part A only covers 100 days of skilled nursing care after any qualifying hospital stay, despite most needing long-term care. SNFs in 2017 also lost seven cents per patient day.

Seema Verma, a CMS administrator who served as the board’s secretary, is using this as an opportunity to state their beliefs concerning the trouble with “Medicare for All” thinking.

“Stripping around 180 million Americans of private coverage and adding them to Medicare won’t fix the problem,”, Verma said in a statement. She added, “The Trump administration is working hard to protect and strengthen Medicare and lower costs while improving quality in order to protect the program for future generations of seniors who have paid into the program their whole lives. If we do not take the fiscal crisis in Medicare seriously, we will jeopardize access to health care for millions of seniors.”.

It is difficult to say at this time how this will play out, and what those in charge of these decisions will do to reduce any possible damages, but it is clear that this is a glaring concern for many members of society.

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