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Social Security and Medicare Still Need Reform

Last update on: Feb 02 2017

The trustees issued their annual reports this week. Their projections show Medicare will be short the needed money in 2024, the same year as estimated last year, and Social Security will be in trouble in 2033, three years earlier than assumed a year ago. But those are only the official projections. The actuaries of the systems believed in recent years that the official assumptions adopted by the trustees weren’t the most likely or realistic. This year isn’t any different. You can read about the facts behind the headlines here.

In 2010 and 2011, the Office of the Actuary felt compelled to issue separate “alternative” analyses of projected future Medicare spending because the scheduled cuts in reimbursement rates for providers of services to Medicare patients are untethered to reality. If the Medicare cuts planned for in Obamacare were actually to go into effect, Medicare’s reimbursement rates would plummet below those provided even by Medicaid by the end of the decade. If rates fell that low, hospitals and other providers would have no choice but to stop taking care of Medicare enrollees, thus causing severe access problems for seniors. That’s a completely unrealistic scenario for political reasons — Congress would never let it happen — and the actuaries have repeatedly said so over the past three years.

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