WASHINGTON–Social Security and Medicare trust funds will remain solvent a year longer than previously estimated, fund trustees report.
The report prompted an intense effort by members of Congress from both sides of the aisle to use the data to their political advantage.
At the same time, the consensus of politicians–regardless of their perspective–is that the Part D prescription drug program as administered by the health insurance industry is working better than expected.
“I would like to start by paraphrasing Mark Twain and saying that reports of Medicare’s death have been greatly exaggerated,” commented Rep. Pete Stark, D-Calif., chairman of the Health Subcommittee of the House Ways and Means Committee, summing up a plethora of analyses about the solvency of the fund.
“Despite the gloom-and-doom forecasts and rhetoric from some of my colleagues, this year’s trustees report shows that Medicare remains solvent and sustainable,” said Stark at an emergency hearing he convened on the report.
Solvency projections over the years have been as few as 4 years and as many as 28 years, he said. “This year, as in most years past, solvency remains strong by historical standards. There is plenty of time to make the necessary adjustments needed to prolong the life of the trust fund.”
At the same time, the program faces “undeniable demographic challenges in future years,” Stark added. He called the report’s warning that funding of Medicare was at 45% “little more than an arbitrary, hidden hatchet designed to eliminate Medicare’s entitlement and continue the march toward privatization started in the 2003 Medicare law.”
The report said that the Social Security trust fund would remain solvent until 2041 and the Medicare fund until 2019.
The fund trustees said in their report that slight reductions in projected benefits and slightly higher tax collections had extended the projected dates that the trust funds would be depleted.
The sole witness at the Health Subcommittee hearing was Richard Foster, chief actuary at the Centers for Medicare and Medicare Services, Baltimore.
Foster said that savings through the prescription drug benefit under Medicare was “bigger than we thought, initially,” because benefit plans health insurers set up to administer the program were able to negotiate better prices than CMS felt they would be able to.