9 Things Elders Should Know About the 2013 Social Security and Medicare Trustees Reports
Posted Jun 03 2013 8:30am
Last Friday, the Social Security and Medicare Trustees issued their annual reports on the current and projected financial status of the two programs. Here are nine easily digestible highlights you should know:
1. Social Security will be able to pay full benefits until the year 2033, unchanged since last year. Thereafter, without changes, Social Security will have sufficient revenue to pay 77 percent of benefits.
2. Trust Fund reserves are growing and will continue to do so until 2020. Beginning in 2021, the cost of the program is projected to exceed income.
3. The date the separate Social Security disability trust fund is projected to deplete its reserves also remains unchanged: 2016. Congress should cover the shortfall by reallocating income across the Social Security Trust funds as it has done 11 times before.
4. Trustees project a cost of living adjustment (COLA) increase of 1.5% to 2.5% for 2014.
5. The cost of $6.3 billion to administer the program in 2012 was a very low 0.8 percent of total expenditures.
Upon the release of the Social Security Trustee's Report, Carolyn W. Colvin, Acting Commissioner of Social Security, said:
“'The Social Security Trust Funds’ projected depletion dates have not changed, and three-fourths of benefits would still be payable after depletion. But the fact remains that Congress needs to act to ensure the long-term solvency of this vital program.'”
“'The projected year for Disability Insurance Trust Fund depletion remains 2016, and legislative action is needed as soon as possible to address this financial imbalance,'” she said.
6. The Medicare Hospital Insurance (HI) Trust Fund will face depletion in 2026, two years later than was projected in last year's report. Thereafter, without changes, dedicated revenues would be able to pay 87 percent of HI costs.
7. Trustees project that Medicare Part B, (physicians' and other outpatient bills) will remain adequately funded indefinitely.
8. Medicare Part D (prescription drugs) are projected to remain adequately funded indefinitely.
9. Medicare Part B premium for outpatient care (usually deducted from beneficiaries' Social Security payment) is projected to remain the same as this year. That's generally $104.90, although upper-income retirees pay more.
Medicare's somewhat improved financial footing is due to reduction of overpayments to Medicare Advantage plans along with some other changes made by the Affordable Care Act (ACA) and slower growth of patient spending.
The Congressional Budget Office projects a nearly 10 percent reduction in Medicare and Medicaid spending over the years 2011 to 2020.
”But the fact that, for example, Medicare spending per beneficiary is projected to grow at an annual rate of 3.7% over the next decade compared to its average of 7.6% from 2000-10, means we can
a) ignore calls for immediate slash and burn
b) implement the ACA, which seems to be helping
c) build and case for both progressive reforms and a more enlightened politics to implement them.”
All the above is the short version; there is obviously much more detail and explanation to these highlights. For the wonks among you who like facts and figures and charts, here are the major pages I consulted to pull this together.