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August 6, 2010 in Nation/World
Social Security, Medicare woes still loom large
Long-term financial outlook cloudy
Treasury Secretary Timothy Geithner watches as Health and Human Services Secretary Kathleen Sebelius discusses a report on Social Security and Medicare on Thursday.
(Full-size photo)
WASHINGTON – Social Security and Medicare continue to face grave financial challenges even though the new health care law may provide added stability to the two massive programs, according to the government’s annual review.
This year, for the first time since 1983, Social Security is projected to pay out more in benefits than it collects in taxes.
And Medicare confronts a new test as the health care law envisions using billions of dollars of projected savings over the next decade to expand medical coverage for younger Americans.
The report, released Thursday by the Social Security and Medicare trustees, estimated that the Social Security trust fund used to pay retiree benefits will remain solvent until 2037, the same outlook as last year.
And it predicted that the Medicare fund covering hospital services for the elderly, which government officials last year said would run out of money in 2017, could now stay in the black until 2029.
Senior administration officials and Democrats on Capitol Hill hailed that as validation of what House Speaker Nancy Pelosi, D-Calif., called the “remarkable impact of health reform.”
But the outlook for Medicare is still extremely cloudy, according to budget experts, including the program’s chief actuary, Richard S. Foster.
As a result of the new health care law, Medicare, which provides health insurance to more than 45 million mostly older Americans, will undergo significant changes in coming years that many experts believe will make it more efficient.
The health care law does not guarantee that the program will be able to keep all the anticipated savings, however. That means that unless Congress finds more money, Medicare could run out of funds much more quickly than Thursday’s report predicts.
“It sounds like Medicare is in much better shape than it is,” cautioned Robert Bixby, executive director of the Concord Coalition, a nonpartisan budget watchdog group.
Bixby pointed to the fundamental problem of using Medicare savings to expand coverage. “You can’t spend the same money twice,” he said. “And since all that money is used for something else, it won’t be available to pay Medicare benefits. We are basically no better off.”
Further complicating Medicare’s future, it is unclear whether many of the initiatives in the new health care law will yield the projected savings.
The law calls for a series of cuts to hospitals and other medical providers that are designed to reflect increased efficiency in the system and the growing number of Americans projected to get health insurance starting in 2014.
But Medicare’s independent actuaries have raised questions about whether Congress will go through with these cuts in future years in the face of political pressure from the health care industry.
Ancient Roman wrecks found in deep water 
liarsinnews on August 06 at 7:14 a.m.
The medicare plan is on the road to complete disaster. My supplemental BC & BS has increased my costs drastically since Obama, poked his nose under the tent doing stuff that penalizes those of us that do not want to burden our children and forcing them to care for their parents. My costs, including Medicare, are over $8,000.00 annually and to a point, I may not be able to afford my supplemental medical insurance much longer..
Scoutster on August 06 at 7:36 a.m.
So, dick, you blame Obama for this?
Why, exactly, is this his fault?
Who did you think was going to pay for your health care except the government (Medicare, of which you are a beneficiary, is “socialized medicine”). And, if you aren’t working, tab is being paid by your children and grandchildren.
Stop being a burden to them by refusing to accept Medicare.
misjustice on August 06 at 7:44 a.m.
@ dick; what “stuff” did President Barack Hussein Obama do that “penalized” you? Please be specific so that I can understand your plight.
As an aside, if you dislike the Medicare Program so much (and the penalities that you endure) you are free to stop using it and buy a private policy on the beloved “free market” for, well, a pittance - I’m sure - of what you are paying now. Right? Riiiiight!
Because the “free market” and the private sector can do everything soooo much better, and cheaper, than gubmint can!
cryssT on August 06 at 9:25 a.m.
unfortunately the price of health care has been rising since the mid 1980’s. wouldn’t matter which President made a change as the Insurance companies are profit oriented and sick people are not profitable. then there’s dental issues but i figure that won’t be worked on for another 50 years.
liarsinnews on August 06 at 2:49 p.m.
Scoutster & Misjustice:
Every December USX (employer in previous life) reviews the cost of supplemental insurance and calculates the retirees monthly portion costs for the ensuing year. I`m loyal to the corporation. Realistically though, all corporations look at the bottom line and are not going to allow the company to fail by paying more than what they feel necessary to survive with benefits they allowed. For 2010, my cost is $584.00 month. When I retired (over 33 years of continuous service) I selected a plan to cover about everything possible, but at a cost. I did it so my kids would not feel obligated to care for me in the event huge costs of medical. Having said that, last December, when most company’s project costs etc, my increase was much higher than the annual costs of most years. I did some investigative work and found out most corporations anticipated the impact of cost related to Obamacare and made adjustments, right or wrong. Its kind of like taxing companies with a increase that everybody knows will be passed on to the consumer. I hope you two understand that the proposed increases in taxes Obama plans on, will be passed on. Its a fact of life and sad to say, there is no way around it.
misjustice on August 06 at 6:11 p.m.
Why, but yes, dick; of course there is a way around it! Deny Obamacare for the dismal failure that it is and be FREE! Go into the “free market” for your health care needs…oh, guess loyality to the company would prevent that…well, good on you.
The real “problem” with health care is huge corporate health insurance companies that skim their profit from the top of your plan, and pay their CEOs tens of millions of dollars; all the while denying claims and stickin’ it to the “small” people…
“The five largest U.S. health insurance companies
sailed through the worst economic downturn since
the Great Depression to set new industry profit
records in 2009, a feat accomplished by leaving
behind 2.7 million Americans who had been in
private health plans. For customers who kept their
benefits, the insurers raised rates and cost-sharing,
and cut the share of premiums spent on medical
care. Executives and shareholders of the five
biggest for-profit health insurers, UnitedHealth
Group Inc., WellPoint Inc., Aetna Inc., Humana
Inc., and Cigna Corp., enjoyed combined profit
of $12.2 billion in 2009, up 56 percent from the
previous year. It was the best year ever for Big
Insurance.”
http://hcfan.3cdn.net/a9ce29d3038ef8a1e1_dhm6b9q0l.pdf
Hey, a 56% increase in profits from 2008 is great, right, dick????
Scoutster on August 06 at 9:00 p.m.
dickadams…
I think you are absolutely right—health care financed through tax mechanisms is going to increase. Incrementally, we will surrender to the truth that single payer is the only model that makes sense.
The health finance reform bill will tax us more. Those of us who were already covered are paying that tax now through our premiums, exclusions, and diminishing coverage.
The underlying value driving health finance reform is that we have made a decision as a society that there needs to be a universal floor of coverage. That seems a noble value for which I am willing to pay. (Yes, I pay taxes.)
liarsinnews on August 06 at 9:24 p.m.
Scoutster: You know what, I agree with you. When I was working I signed up to give united way 1% of my annual income. Reading what misjustice has opined he reminds me of someone with a chip on his shoulder. We all pay taxes, even the poor. I do think though everybody should pay federal income tax even if its only $5.00 per year. I`m also very concerned for the “truly” needy and in our wonderful country we`ve let down too many.
liarsinnews on August 06 at 9:41 p.m.
Addendum: I think most people in our country have benefited from USX. Seems to me the Carnegie libraries through out our nation points out how really good our corporation is and most of the retired people are loyal. For what MY corporation has done for mankind, I`d be a fool not to be very loyal.
misjustice on August 07 at 8:18 a.m.
Dick, there’s no chip on my shoulder; I was offering a reason for our out of control increases in health care premium costs besides your reason, blaming “Obamacare.”
Increased profits, of up to 56%, during an economic downturn seems to me to be unwarranted, greedy, and bordering on economic terrorism. Especially when health care is a necessity.
We have great doctors, nurses, technicians, and other health care providers. What is wrong with our system is that mega insurance corporations are permitted to deem whom is “worthy” of access to care providers and to deny access to others all the while raising premiums, co-pays, and fees to stratospheric levels; levels which are unsustainable for many in our nation.
My sister just filed bankruptcy and will most likely lose most of everything that she has worked for the last 20 years. The reason? Her husband is gravely ill.
The only insurance they have is through her job (which she may lose due to lay-offs); my brother in-law was laid off and lost his insurance coverage, under COBRA, once his unemployment insurance ran out. The financial burden all falls on her shoulders, including his health costs. In addition to suffering from heart failure he was recently diagnosed with stomach cancer. They face financial ruin, not due to being irresponsible but due to illness. Their story is not an isolated one; millions of Americans face similar fates. In a nation that is as rich as ours, no one should face bankruptcy due to getting sick; but that is what is happening all across America.
I am not okay with that.
Are you?