From NPR News, this is ALL THINGS CONSIDERED. I'm Robert Siegel.


And I'm Melissa Block. The outlook has brightened a bit for Medicare's finances. That's according to the annual Social Security and Medicare trustee's report released today. It predicts the trust fund will remain solvent two years longer than previously expected. The trustees say among the reasons for that are savings produced by the Affordable Care Act.

More now from NPR's John Ydstie.

JOHN YDSTIE, BYLINE: The trustees now project that the Medicare hospital insurance trust fund will remain solvent until 2026. That's two years longer than last year's projection. After that, the program would only be able to pay 87 percent of promised benefits. The modest improvement in the outlook is partly due to lower projected costs for skilled nursing and the Medicare Advantage program.

The report credited the Affordable Care Act, widely known as Obamacare, for creating a framework for cost reduction. Many Republicans dispute that view, but at a news conference unveiling the report, one of Medicare's public trustees, Robert Reischauer, a former director of the Congressional Budget Office, said the ACA could continue to have a positive effect.

ROBERT REISCHAUER: Because of the restraints included in the Affordable Care Act, which will build over time, and the structural reforms that that act is encouraging, there's reasons, I think, to be quite optimistic.

YDSTIE: The rate of health care cost increases has slowed substantially over the past three years. Kathleen Sebelius, Secretary of Health and Human Services and also a trustee, said continuing that trend is important because health care already represents 17 percent of the economy.

KATHLEEN SEBELIUS: Lowering overall health costs and improving health outcomes is important for the economy, but it's also important for the prosperity of the Americans.

YDSTIE: As for Social Security, its situation remained largely unchanged. Its trust fund is still expected to become insolvent in 2033. After that, incoming payroll taxes will only be able to fund 77 percent of promised benefits, unless Congress acts. Public trustee Charles Blahous said waiting too long to implement changes could lead to sharp tax increases or benefit cuts.

CHARLES BLAHOUS: So by any objective measure, it's getting very late in the game to deal with Social Security finances in a realistic way.

YDSTIE: But there's little indication Washington will take action anytime soon. John Ydstie, NPR News, Washington.

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