The Social Security and Medicare trustees recently released their annual reports amidst controversy over the numbers. The Social Security trustees say that program financing is eroding faster than anticipated, and the disability trust fund, which operates separately from the retirement trust fund, will be fully exhausted by 2016 — two years earlier than predicted one year ago. "Legislative action is needed as soon as possible," the trustees say.
Medicare’s outlook is worse. Hospital trust fund expenditures have exceeded income annually for almost a decade. Although the 2010 healthcare reform legislation cut hundreds of billions in spending from Medicare, the trustees warn that provisions that are designed to reduce costs “may not be sustained.” The trustees cited the current physician fee schedule formula as one example. Trustee projections assume, as required by law, that the government will cut Medicare’s payment rates for doctors’ services by more than 30 percent at the start of 2013. However, the trustees say it’s a “virtual certainty” that “cognizant of the disruptive consequences,” lawmakers will override the reduction as they have every year since 2003. This makes estimates of Medicare’s solvency “highly uncertain” and future costs are likely to be substantially higher than estimated.
If either trust fund becomes fully insolvent, the programs would collect only enough money in payroll taxes to pay partial benefits. TSCL believes that one area of savings for immediate attention is the problem of fraud, waste, and abuse. This is particularly so for Medicare, where improper payments are estimated to cost taxpayers and beneficiaries between $80 and $160 billion a year. Authorities recovered a record $4.1 billion for Medicare last year.
“The return on taxpayers’ dollars makes fighting improper payments well worth the effort,” says TSCL Chairman Larry Hyland. According to government estimates it appears that at the very least there is a $4.90 return on every dollar spent. TSCL continues to support legislative funding for Medicare antifraud measures.
Are the Trust Funds in trouble or is this just media hype as some charge? Learn for yourself what the Trustees say about Social Security and Medicare solvency. Here are the links to the 2012 Social Security Trust Fund Trustees Report and the 2012 Medicare Trustees Report.
Sources: 2012 Social Security Trustees Report, April 23, 2012. 2012 Medicare Trustees Report, April 23, 2012. “Feds Announce Biggest Ever Medicare Fraud, Totaling $450 Million,” Scott Cohn, CNBC, May 4, 2012. “Health Care Fraud And Abuse Control Program Annual Report For Fiscal Year 2010,”January 2011.