Medicare's fortunes have improved and its trust fund is now likely to have cash reserves until the year 2005, the system's trustees said Friday.

That is three years better than the trustees forecast last year.The trustees of the Social Security and Medicare programs, including three Cabinet members, also reported big gains for the Social Security old age and disability trust funds. The trustees said they "will have enough funds to cover expenditures for about 60 years into the future."

The board said Medicare's trust fund grew by nearly $14 billion in calendar 1987 and finished the year with reserves of $53.7 billion.

Under moderate economic conditions, those hospital insurance reserves are forecast to grow to nearly $153 billion over the next decade before running out of money by the year 2005.

The trustees urged Congress to "take early remedial measures to bring future (Medicare) costs and finance into balance" and to avoid the need for later, potentially precipitous changes."

In the early 1980s, the trustees had said Medicare's trust fund would go bankrupt in the 1990s. But its financial position has improved partly as a result of federal constraints on hospital payments.

The Medicare program provides hospital insurance for 28 million Americans 65 or older and 3 million disabled workers under 65. The program took in $64.1 billion in payroll taxes and other income in 1987, and paid out $50.3 billion.

The Social Security old age and disability funds, on the verge of bankruptcy just a few years ago, experienced even more robust growth. They grew by $22 billion in 1987, "reflecting the continuing growth in the economy," the trustees said, and finished the year with $62.1 billion in reserves.

The old age and disability program provides monthly checks to 38 million workers, paid for primarily by payroll taxes on 130 million workers and employers. The program had income of $210.7 billion and disbursements of $187.7 billion in 1987.

The trust funds, now equal to about three months' benefit payments, are expected to bulge rapidly over the next 27 years, peaking at more than $12 trillion--$2 trillion in today's dollars--in 2015.