Jeb Bladine: Medicare ‘A’ needs a sense of urgency
Human nature features some disruptive tendencies. One is a general inability to identify, acknowledge and act to prevent pending financial catastrophes. Two out of three just isn’t good enough.
Oregonians, for decades, have identified and acknowledged the ongoing financial fallout of our Public Employees Retirement System. We simply lacked the will to act and, as a result, state and local government budgets have cut services to pay for those chickens coming home to roost.
Americans, in the early 2000s, were warned a growing housing bubble and high-risk mortgage investment policies posed clear threats of financial calamity. Many people identified that pending fiasco, but systemically, it wasn’t even fully acknowledged before it turned into the Great Recession of the late 2000s and early 2010s.
Those human foibles, however, may pale in comparison to America’s lackadaisical response to financial challenges facing Medicare and Social Security.
dentification and acknowledgment stages were completed long ago, but actions to avoid fiscal failure — more so with Medicare than with Social Security — have been slow and inadequate.
This week, trustees punctuated that point in their annual report on the current and future financial status of Social Security and Medicare trust funds. Interested people can read the 254-page trustee report, with its well-written program overviews and documented financial projections, or go to the Social Security Administration’s instructive summary.
From the report: “The estimated depletion date for the (Medicare Part A) trust fund is 2026, three years earlier than in last year’s report.”
Trustees attributed reduced Medicare income to lower payroll taxes and lower revenue from taxation of Social Security benefits. They attributed rising costs to legislation increasing hospital spending, plus higher Medicare Advantage payments.
Conclusion: “Consideration of further reforms should occur in the near future … The Trustees recommend that Congress and the executive branch work closely together with a sense of urgency to address the depletion of the HI trust fund and the projected growth in HI (Part A) and SMI (Parts B and D) expenditures.”
Any sense of urgency, unfortunately, has not been a hallmark of our government’s response to a crisis evident to statisticians since the early post-war boom of babies.
Here’s a troublesome side note: Trustees of these funds include the Secretary of the Treasury (managing trustee), Secretary of Labor, Secretary of Health and Human Services, and Commissioner of Social Security. But positions for two Public Trustees have been vacant since 2015.
Jeb Bladine can be reached at jbladine@newsregister.com or 503-687-1223.
Comments
Don Dix
As it is now, SS surplus is used to buy 15 year government bonds (those bonds are redeemed when the fund needs money to pay benefits). But the money that pays for those bonds is immediately available for government spending, and not set aside.
If the SS system 'invested' in corporate bonds or equities (private), the government would be left outside the loop. Adding to that, disallow the government from 'taxing' benefits whose original payment was derived from paychecks already taxed on the gross total.
Of course, it is more complicated than these simple suggestions, but it's an interesting place to start. And anytime the government is kept at bay, the process becomes less muddled and cumbersome, in my opinion.