2013 Medicare Trustees’ Report Gives the HI Trust Fund 2 More Years

Commentary, Medicare Set-Aside Blog, Social Security on June 4, 2013
Posted by Jennifer Jordan, JD, MSCC


On May 31, 2013, the Social Security and Medicare Board of Trustees posted the 2013 Annual Reports and the Medicare Health Insurance Trust Fund gained two years over the 2012 predicted depletion of 2024. Due to increased payroll deductions and higher premiums imposed on the wealthy and some cost saving successes of the Affordable Care Act being realized, the predicted depletion of the HI Trust Fund is now estimated to occur in 2026. Since 2010, Medicare spending per beneficiary has risen by only 1.7% whereas for the two prior decades, it was over 6% on average so the savings are obviously making difference. With continued success in cost savings and improvements in the MSP programs, the trust fund may be able to hold depletion at bay for the foreseeable future.

Social Security projections, however, remained the same as predicted in 2012, which anticipates a 2033 depletion. Social Security disability insurance also remains the same with a predicted 2016 depletion. SSDI applications have grown from fewer than 300,000 in 1990 to 850,000 today. The applications have increased by 30% since just 2007 and SSDI has become the unemployment alternative for middle age males in a soft job market. Due to this increased volume of applications, ALJs reviewing those applications on behalf of CMS feel as if they do not have adequate time to review the applications that typically contain over 500 pages of medical records, notes form doctors and evidence provided by experts and are approving questionable claims they otherwise would have denied if given adequate time to investigate. In a federal lawsuit filed by the ALJ union in April, over 1400 judges allege that CMS expects them to decide over 700 claims per year causing them to rush evaluations to the detriment of the taxpayers. The alleged productivity goal is outlined in the agency directive and the suit alleges that directive violates both the Social Security Act and the Administrative Procedures Act.

For our purposes, it is important to remember that these two programs are intertwined. Once a beneficiary has received 24 SSDI payments, they also gain access to the HI Trust Fund so if they are not necessarily adequately disabled because of a rushed decision, then Medicare suffers too. Of the nearly 11 million people receiving SSDI, remember that they are younger with longer life expectancies than those qualifying at age 65, did not pay into the system as much as expected due to exiting the workforce at an earlier age and have allegedly disabling chronic conditions that qualified them for the program that may require consistent medical treatment for life. These individuals are far more burdensome to the system than those who work to retirement age, so if they are qualifying due to relaxed standards or meeting quotas, then that really needs to be evaluated as SSA only has 3 more years to fix that problem.


Click here to read the Letter of Transmittal: