WASHINGTON--In a new report, The American Academy of Actuaries has evaluated 16 possible reforms for Medicare's financial problems and concluded that it would take a number of the options to solve them.

"There is no single solution to the challenges facing Medicare," said Cori Uccello, AAA's senior health fellow. "Viable options will likely require shared burden among taxpayers, Medicare beneficiaries and health care providers."

Among the reforms, the actuaries looked at increasing the payroll tax rates for Medicare, increasing premiums, slowing the growth of provider payments and increasing the age at which people are eligible for benefits.

According to the most recent Medicare trustees' report, by 2011, hospital insurance expenditures will exceed all revenues into the program trust fund, including interest income. By 2019, the trust fund assets are expected to be depleted, and projected payroll taxes will cover only 79 percent of benefit costs, with the percentage decreasing thereafter, the report said.

Medicare's Part B, which covers physician services and DME, is already getting more of its funding from the government's general fund than it has in the past, according to the report.

Increasing health care costs and a dwindling ratio between workers paying into Medicare and beneficiaries taking out of the program are the reasons for its budget problems, the actuaries said.

"Reforms to the Medicare program are needed, and the sooner the better," the report said, noting that mounting Medicare expenditures will strain the federal budget--and maybe the entire economy.

To download the report, click here.

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