This week, the Social Security and Medicare Trustees released their annual reports on the financial standing of the two programs. In addition, the Supreme Court announced its decision on the immigration orders President Obama released back in 2014.
Trustees Release Annual Financial Reports
On Wednesday, the Social Security and Medicare Trustees released their annual reports on the financial outlook of both programs. As expected, they found that Social Security and Medicare are experiencing long-term financing shortfalls. Social Security’s combined trust funds are expected to be depleted in 2034, which remains unchanged from last year’s report. Medicare’s Hospital Insurance (HI) trust fund is expected to be depleted in 2028 – two years earlier than the trustees projected last year.
In the report released on Wednesday, the trustees estimated that Medicare beneficiaries will see a Part B premium increase of nearly $30 per month next year, from $121.80 to $149. However, due to the hold harmless provision, most beneficiaries will continue paying a monthly premium of $104.90. That’s because experts are projecting another record-low Social Security cost-of-living adjustment (COLA) for 2017. The trustees estimated that a 0.2 percent COLA will be paid next year, which would amount to a mere $2 per month benefit increase for someone receiving a $1,000 monthly check.
The low COLA announcement from the trustees comes just weeks after TSCL revealed the findings of its 2016 Survey of Senior Costs. The annual survey examined the cost increases of thirty-eight key items between 2000 and 2016, and it found that Social Security benefits have lost 23 percent of their purchasing power since 2000. During that sixteen-year period, the COLA rose by 36.3 percentage points, while typical senior expenses like housing, Medicare premiums, and prescription drugs jumped 75.3 percent. The findings of the survey are a clear sign that the COLA is growing too slowly, and that it’s time to switch to a more accurate measure of inflation like the Consumer Price Index for Elderly Consumers (CPI-E).
Just hours after the trustees released their annual reports on Wednesday, members of the House Ways and Means Social Security Subcommittee met with Chief Actuary Stephen Goss to discuss the findings. Many of those present at the hearing expressed their commitment to addressing the program’s funding shortfall. Chairman Sam Johnson (TX-3) said, “The longer we wait, the tougher it will get to fix Social Security. So the sooner we act – the better.” Chief Actuary Goss agreed, saying: “The trustees have consistently advised that enacting changes soon, even if with delayed effective dates, will allow more options to be considered, more advance warning for those affected, and a more gradual phase-in of adjustments.”
TSCL agrees that legislative action is needed soon in order to avoid harsh benefit cuts for Social Security beneficiaries. In the months ahead, we will continue to advocate tirelessly for legislation like the Social Security 2100 Act (S. 1904, H.R. 1391), which would strengthen the financing of the program for decades to come while also strengthening benefits for those who depend on them the most. For progress updates, follow TSCL’s legislative team on Twitter, or visit the Legislative News section of our website.
Supreme Court Rules on Immigration Orders
On Thursday, the Supreme Court announced its 4-4 decision on a challenge to President Obama’s immigration orders, which were released back in 2014 with the intent of halting the deportations of nearly 5 million undocumented immigrants. The split decision means the lower court’s ruling is left in place, and the executive orders will not take effect.
TSCL has been monitoring the case closely in recent months because if implemented, the executive orders would have provided millions of undocumented immigrants with controversial access to Social Security and Medicare benefits. In a press release, Ed Cates – TSCL’s Chairman – said: “Concern is high that undocumented immigrants who were illegally present and who worked under fake, invalid, or fraudulent Social Security numbers may benefit based on such work, potentially at the expense of others who paid into the system the legal way.”
To read the full statement from Chairman Cates on Thursday’s Supreme Court decision, click HERE.