Medicare Trustee Report 2012
The financial outlook for Medicare is also uncertain because some provisions of current law that are designed to reduce costs may not be sustained. The clearest example of this issue is the sustainable growth rate (SGR) formula for physician fee schedule payment levels. The projections in this report assume that, as required by current law, CMS will implement a reduction in Medicare payment rates for physician services of more than 30 percent at the start of 2013. However, it is a virtual certainty that lawmakers, cognizant of the disruptive consequences of such a sudden, sharp reduction in payments, will override this reduction just as they have every year since 2003.

Short-Range Results
The estimated exhaustion date for the HI trust fund remains at 2024, the same year shown in last year’s report. As in past years, the Trustees have determined that the fund is not adequately financed over the next 10 years. HI expenditures have exceeded income annually since 2008, and projected amounts continue doing so through the short-range period until the fund becomes exhausted in 2024.