Social Security and Medicare Boards of Trustees Call for Swift Action by Lawmakers in 2015
Last week the Social Security and Medicare Boards of Trustees released their 2015 Annual Reports, recommending “prompt corrective action by lawmakers.” In their Message to the Public, the most urgent action was called for the Social Security Disability Insurance program, which has trust fund reserves that are expected to deplete in late 2016. A 2016 depletion date was also projected by the Trustees last year. Without immediate action, they anticipate a reduction in payments to Social Security Disability beneficiaries next year.
Trustees also called for the enactment of legislation to address the eventual depletion of the Medicare Hospital Insurance Trust Fund, which continues to be anticipated in 2030, unchanged from the Trustees’ 2014 report. The Centers for Medicare and Medicaid Services issued a press release highlighting the improved outlook in 2015, which is 13 years longer than had been projected in 2009.
It is anticipated that Medicare Supplementary Medical Insurance (Part B and Part D) will remain solvent for the indefinite future, due to financing from general fund revenues and beneficiary premiums which are adjusted annually in consideration of increased costs. Trustees project that Medicare costs will increase from 3.5% of GDP in 2014 to be 5.4% of GDP in 2035 and roughly 6% of GDP by 2089.
The Trustees also assessed Social Security as a whole, hypothetically combing the trust funds for Disability Insurance and Old Age and Survivors Insurance, but noted there was no legal authority for one program to finance the other. The combined Social Security Trust Fund satisfied the short-term, 10-year, test as financially adequate but failed long-term, with solvency of the combined trust fund being projected through 2028.
2015 Social Security and Medicare Boards of Trustees Report: http://www.ssa.gov/oact/trsum/