The Social Security Trust Fund, which covers benefits for retirees, worker survivors and the disabled, will be able to pay full benefits through 2035, gaining an extra year from what was expected last year, according to the report released by Medicare administrators. and social security.
But the trustees warned about the future of rights programs, among the largest in the country, expressing concern that both face long-term funding shortfalls. The report’s projections for Medicare — which covers nearly 64 million people — indicate a “need for substantial changes” to address the program’s fiscal challenges, the report said.
“It’s just dangerous that we’ve let it get to this point,” said Maya MacGuineas, chair of the Committee for a Responsible Federal Budget, a nonpartisan think tank. “What is concerning is if Congress has an answer … there is no indication that it plans to make the necessary changes.”
The trustees’ report has repeatedly warned about the fragility of the two programs, which aim to help older Americans stay out of poverty. America’s aging population, combined with its increased longevity, has added financial strain, but congressional action is unlikely amid fierce divisions over how to address the issues.
Trustees assumed the coronavirus pandemic — which initially delayed and changed the way some seniors receive care — won’t have a long-term effect on either program’s financial projections. But the report notes that there is no consensus on the lasting impact of the pandemic perhaps, and that the tracery the paths of the economy and the pandemic have become more uncertain since administrators developed assumptions in mid-February.
One question is whether the long-term effects of covid, including new-onset diabetes, heart disease and long covid – a condition linked to fatigue, brain fog and other symptoms – might increase costs to the health system down the road.
The pandemic has hit the most vulnerable populations particularly hard – such as the elderly – resulting in hundreds of thousands of deaths. The current Medicare population has lower rates of costly chronic conditions than before the pandemic, leading to cost-cutting projections through about 2028, directors said.
Administration officials told reporters that the improved outlook for both programs reflected progress in stimulating the economy after the pandemic began.
Medicare spending on services other than the fight against the coronavirus — particularly elective care — was also significantly lower than expected in 2020 and 2021, the report notes. Detecting and treating covid-19 has increased costs, but has been more than offset by reduced use of other services, according to an administration official, who spoke to officials. journalists on condition of anonymity due to the rules established by the administration.
The insolvency of trust funds does not mean that the programs will no longer operate. Instead, they can start paying smaller benefits. If the Social Security Trust Fund is exhausted in 2035, the government would pay 80% of the scheduled benefits. And if Medicare’s trust fund for hospital care is insufficient, the program would be able to pay 90% of projected costs in 2028, according to the report.
“The passage [in projected insolvency] from 2026 to 2028 gives policymakers more time to find solutions, but also confirms the need for action to maintain the [Medicare] program on a solid financial footing in the years ahead,” Tricia Neuman, senior vice president of the Kaiser Family Foundation and Biden’s nominee for the Medicare and Social Security board, wrote in an email.
A pair of top GOP leaders from the influential House Energy and Commerce Committee called for quick bipartisan action to protect Medicare in a statement, though they did not offer specific actions.
Meanwhile, House Ways and Means Chairman Richard E. Neal (D-Mass.) Countered that “Democrats will continue to fight to ensure these essential programs remain strong through good times and bad.” “.
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