Medicare is always projected to be insolvent

Category: Healthcare • Jobs • Social Security
Posted on: June 17, 2011 9:55 AM, by Mike

The projections used by the Social Security Administration to determine when it will become 'insolvent' are notoriously pessimistic, in that they have been estimating that Social Security will be DOOOMED! in 28-38 years going on nearly twenty years. Like Zeno's spear, we never seem to hit that wall. Well, it's spread to Medicare. Jared Bernstein lays out the past twenty one years of Medicare* estimates for us:



Just to make this clearer--because I like helping!--I've made a couple of changes:



If we take this year's prediction seriously--or at least consider it the lower bound--then many more predictions will turn out to be wrong too. The real crisis that faces us is not a deficit decades from now, but the awful, miserable employment deficit we face today.

The stupid, it burns.

http://scienceblogs.com/mikethemadbiologist/2011/06/budgetary_assumptions_are_alwa.php

And "Won't get fooled again". Our side does "nuance" and "bipartisanship" and "Won't look back to the past" etc. etc.

Congress has been constantly making changes to Medicare to prevent it from becoming insolvent. These changes have been both on the contributions side and on the provider payment side.

The problem is that provider payments have been cut about as much as possible, and the only option now to save Medicare as is would be to constantly raise the contribution rate. Currently it is 2.9% for all wages and salary amounts. In 2013 there is an extra surcharge on high-income tax returns.

High income recipients already pay higher premiums.

Since the worker/beneficiary ratio has recently been as high as 3.6 and is slated to fall below 2.6 no matter what happens, the increase would have to be pretty hefty. It may well be a better option than other options, but to claim that nothing needs to be done is just improvident and risks seniors' health, because this is a program seniors really, really must have, and yes, it really really is going insolvent.

Since 2008 the HI fund has been spending more than receipts.

The problem is not temporary and pretending it doesn't exist is the most foolish, irresponsible thing I can think of.

Btw, under current law by 2018 payments to SS Disability recipients will have to be cut. Social Security is going BK too.