Medicare, Social Security trustees’ reports released

Summary here. Basically, according to the report, it’s Obamacare to the rescue, though all the programs – Social Security, Medicare, and Disability Insurance – need more help. Highlights:

  • Longer term, Medicare funding is better off, thanks to Obamacare. Caveat: the improvement……..

…….. is premised on the assumption that productivity growth in the health care sector can match that in the economy overall, rather than lag behind as has been the case in the past. This report notes that achieving this objective for long periods of time may prove difficult, and will probably require that payment and health care delivery systems be made more efficient than they are currently.

Keep in mind that Obamacare has programs to encourage more efficient health care delivery. We’ll see if they work.

  • Medicare has a short-term problem:

The HI [Health Insurance] Trust Fund balance will fall below one year’s projected expenditure beginning in 2012, which means the test for short-range financial adequacy is not met.

  • Short-term, Social Security is under a bit of strain because high unemployment has eaten into current revenues. Long-term, SocSec is better off, thanks, oddly, to Obamacare. Here’s how: As health care reforms “bend the cost curve,” some of the money that would have paid for health benefits will end up in employee salaries. Those salaries, of course, are assessed payroll taxes.
  • “The Disability Insurance (DI) Trust Fund, however, is now projected to become exhausted in 2018, two years earlier than in last year’s report. Thus, changes to improve the financial status of the DI program are needed soon.”

Social Security report is here. Medicare report is here.

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