If current spending trends continue, Medicare will be insolventby 2028, according to the Medicare Trustees Report releasedWednesday.

By the end of this decade, both Medicare and Social Securitywill be doling out more in benefits than they receive in taxes.

The new report projects that Medicare will run out of money twoyears sooner than last year's report projected. The morepessimistic estimate is a result of changes in anticipatedincomes.

The good news, however, is that because health care costs haveactually slowed in recent years, the depletion of Medicare's trustfund will not come as soon as estimated several years ago. In 2009,for instance, Medicare was projected to go broke by 2017.

Since 2009, per-enrollee Medicare spending has grown lessquickly than the economy, at only 1.4 percent per year. However,Medicare Part D spending on prescription drugs is expected to 5.8percent per year over the next decade.

That the drug benefit is growing faster than other medicalservices is indicative of the dramatic price increases for drugsthat treat cancer and other common illnesses such as hepatitis andarthritis.

Medicare's planned reforms to rein in costs are only justbeginning, however. It was this year that the program is putting inplace a program that reimburses hospitals for certain surgeriesbased on hospital readmission rates post-operation. And beginninglast year, Medicare reserves 1.5 percent of its funds to rewardtop-performing hospitals based on quality of care andefficiency.

In 2019, Medicare plans to begin a more aggressive outcome-basedsystem of reimbursement, called MACRA, that will hopefully benddown the cost curve and keep the massive health care program thatserves tens of millions of seniors solvent for many more years tocome.

The other most notable proposal to rein in Medicare's costs isto raise the age of eligibility. In the health care overhaulproposed by House Republicans earlier this week, the age wouldincrease from 65 to 67.