“The Social Security and Medicare Trustees reports issued today send a clear message to Congress: Despite the short-term improvement, it must act to protect the benefits that people have earned and paid now and in the long term,” AARP CEO Ann said. Jenkins in a statement after the reports were published. “The stakes are too high for the millions of Americans who depend on Medicare and Social Security for their health and financial well-being.”
On a call with reporters, a Biden administration official said the economic recovery from the 2020 recession “has been stronger and faster than originally expected,” and that has led to a more optimistic outlook, due in large part to higher payroll tax revenues. The official also said that due to recent increases in the Consumer Price Index (CPI), the government’s main measure of inflation, the Social Security cost-of-living (COLA) adjustment for 2023 could be as high as 8 percent. That would exceed the 5.9 percent increase — the largest annual payment for monthly benefits in four decades — that beneficiaries received this year.
Another administrative official said the trustees estimate that the current base monthly premium for Medicare Part B will remain flat at $170.10 in 2023. Part B covers doctor visits, diagnostic tests, and other outpatient services. Health and Human Services Secretary Xavier Becerra said recently that there could be savings for Part B registrants next year due to projected lower prices and spending on the new Alzheimer’s drug Aduhelm. Both the COLA and Part B installments for 2023 will not be final until the fall, when more recent data on cost of living and Medicare spending will be available. Part B premiums are usually deducted directly from Social Security benefits.
Medicare Trust Funds
year 2022 Report He found that Medicare’s Hospital Insurance Trust (HI), which pays for hospital inpatient expenses, may run short of money in 2028, two years after an estimate in last year’s report. According to the trustees, if nothing changes, revenue in 2028 will still cover 90 percent of Medicare costs.
During the pandemic, especially early on, hospitals had COVID cases, many vulnerable Medicare beneficiaries succumbed to illness, and many elective procedures were suspended. Because of that, the report says, increased spending on Medicare’s COVID care has been largely offset by the decline in non-COVID care. Trustees anticipate a return to pre-pandemic health care spending levels by 2024.
The Medicare Part B Supplemental Medical Insurance (SMI) Trust, which pays for physician and outpatient services, and Part D, which covers prescription drug benefits, is able to meet indefinitely, thanks to funding from revenue public and premiums to the beneficiaries.
Social Security Trust Funds
Trustees too I reported the two Social Security Trusts – which helps pay retirement and survivors benefits (the Old Age and Survivors Insurance Trust, or OASI) and Disability Insurance (DI) fund. Based on the trustees’ current projections, the OASI trust could run out in 2034, one year after the trustees predicted in their 2021 report. After that, the program can pay 77 percent of the benefits from the income received. The report says that the DI fund covering disability benefits will never be depleted for at least 75 years, the first time since 1983 that such a fund will be able to meet over the entire forecast period.
The trustees also released a forecast for how long OASI and DI assets embedded in Social Security trusts will last. They estimated that mutual trusts could decline in 2035, one year later than they projected in their 2021 report. After that, mutual trusts would, in theory, be able to pay about 80 percent of the interest from the income received.
“The trustees recommend that legislators address the anticipated shortfall in trust funds in a timely manner in order to gradually introduce the necessary changes and give workers and beneficiaries time to adjust,” says the Social Security report.
Dena Bunis covers Medicare, Medicaid, Health Policy, and Congress. She also writes the “Medicare Made Easy” column for the AARP Bulletin. An award-winning journalist, Bonis has spent decades working for urban dailies, including as the Washington bureau chief for a newspaper. Orange County Register As a writer on health policy and the workplace Newsday.