From the Washington Examiner July 13, 2015
President Obama said Monday that despite the dire predictions, neither Social Security nor Medicare is in “crisis,” and that the Affordable Care Act has helped.
“Medicare and Social Security are not in crisis; nor have they kept us from cutting our deficits by two-thirds since I took office,” Obama said during a conference on aging convened at the White House Monday. However, “both programs are facing challenges because of the demographic trends,” including the waves of baby boomer retirements, Obama conceded.
“For Medicare, that means we’ve got to keep slowing the growth of healthcare costs and keep building on the progress we’ve already made in the past few years,” Obama said.
Since the ACA took effect, the Medicare trust fund’s solvency has been extended 13 years, Obama said. “We’re moving Medicare toward payment models that require quality of care instead of quantity of care as the measure of what you get paid; creating a different set of incentives.”
And this from the last Medicare Trustees Report. Is it simply an effort by the Administration to mislead or is it the ever-present liberal naiveté and the belief that something will work because it’s supposed to and that no variations or unexpected consequences are possible? Like no other I can remember this Administration has cranked up the propaganda spin machine with optimistic projections and assumptions. The only question is how long it will take for reality to smack us all in the face.
The Trustees project that HI tax income and other dedicated revenues will fall short of HI expenditures in most future years. The HI trust fund does not meet either the Trustees’ test of short-range financial adequacy or their test of long-range close actuarial balance.
The Part B and Part D accounts in the SMI trust fund are adequately financed because premium and general revenue income are reset each year to cover expected costs. Such financing, however, would have to increase faster than the economy to cover expected expenditure growth.
The financial projections in this report indicate a need for additional steps to address Medicare’s remaining financial challenges. Consideration of further reforms should occur in the near future. The sooner solutions are enacted, the more flexible and gradual they can be. Moreover, the early introduction of reforms increases the time available for affected individuals and organizations—including health care providers, beneficiaries, and taxpayers—to adjust their expectations and behavior.
The Trustees recommend that Congress and the executive branch work closely together with a sense of urgency to address the depletion of the HI trust fund and the projected growth in HI (Part A) and SMI (Parts B and D) expenditures.
As for Social Security, we have covered that many times. Congress and this Administration simply choose to ignore the Trustees warnings (like the state governments and their pension systems).
QUINNSCOMMENTARY 