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Trustee reports: Social Security and Medicare still face financial woes

Published in RINewsToday on April 10, 2023

Over a week ago, the Trustees of the Social Security and Medicare trust funds released their annual reports on the financial health of these two programs. As in prior years, the trustees found that the Social Security and Medicare programs both continue to face significant financing issues.

The latest Social Security projections show the program is quickly heading toward insolvency and calls for Congress to find policy solutions sooner rather than later to prevent abrupt changes to tax or benefit levels.  The Washington, DC-based National Committee to Preserve Social Security and Medicare (NCPSSM) and other aging advocates are urging Congress to take prompt action to strengthen and expand Social Security, while Republicans have been calling for cuts to future retirees’ benefits and at least partly privatizing the program. 

This 270- page 2023 Social Security Trustees Report warns that if Congress does not act, Social Security’s Old-Age and Survivors Insurance and Disability Insurance (OASI and DI) Trust Funds, which help support payouts for the elderly, survivors and disabled, will become depleted in 2033 (that’s a year earlier than forecast last year), becoming totally insolvent in 2034 when beneficiaries would only receive about 80% of their scheduled benefits. 

According to the Social Security Administration (SSA), roughly 66 million people received monthly Social Security checks in 2022 (175,840 in Rhode Island). A vast majority, or about 57 million of those beneficiaries, received benefits through the OASI Trust Fund, compared to nearly 9 million people who received benefits through the DI Trust Fund. 

The trustees say that Social Security funds would be fully depleted in 2034 because of expectations of a slowed economy and reduce labor productivity, considering inflation and economic input.

Although the DI Trust Fund asset reserves are not projected to become depleted during the 75-year projection period, being able to pay full benefits through 2097, the combined Social Security funds would only be able to pay 80% of the scheduled benefits after 2034, says the trustees report.

Taking a look at Medicare’s fiscal health

Medicare, the hospital insurance trust fund referred to as Medicare Part A, will only be able to pay scheduled benefits in full until 2031, according to the 273-page trustees’ annual report. The program covered 65 million seniors and people with disabilities in 2022, and will only be able to cover89% of total scheduledbenefits at that time.

Although the Medicare Part A Hospital Insurance trust fund will become insolvent in just eight years, Medicare spending as a whole (including Parts A, B, D, and Medicare Advantage, will continue to grow over the coming years.

The Medicare Trustees project a shortfall of 0.62 percent of payroll, or 0.3 percent of Gross Domestic Product (GDP), noting that it would take about a 21 percent (0.6 percentage point) increase in the payroll tax rate or a 13 percent spending cut to restore the program’s solvency.

The improvement of Medicare’s hospital trust fund’s finances over last year’s projections can be tied to lower estimates for health care spending after the height of the Covid-19 pandemic along with more projected income that the trustees estimate coming from a larger number of covered.

Dueling political statements

With the Social Security and Medicare Trust Fund reports released on March 31, 2023, the Chair and Ranking Members of the House Ways and Means (HWM) were quick to issue dueling statements to give their political spins. HMW’s Subcommittee on Social Security has jurisdiction on bills and matters related to the Social Security Act.

House Ways and Means Chairman Jason Smith (R-Missouri) charged that reckless Democratic spending has impacted the financial viability of the Social Security and Medicare Programs.  “Thanks to President Biden’s economic failures, seniors’ hard-earned benefits are further under threat. Social Security’s combined trust funds are expected to become insolvent a full year sooner than forecast in the previous report as a result of a slowed economy and Democrats’ inflation continuing to outpace wage growth. And Medicare’s latest report comes amidst Biden’s plans to slash seniors’ access to innovative new cures and treatments,” says Smith, stressing that “the first step to protecting these programs is “growing the economy – not budget gimmicks or tax increases that hold back economic growth.

On the other hand, House Ways and Means Committee Ranking Member Richard E. Neal (D-MA) counters Smith’s political perspective. “While Democrats are committed to the long-term health of these programs, Republicans are launching another shameful assault on the economic well-being of millions of workers and retirees with their plan to make drastic cuts to Social Security and Medicare, warns Neal. “Their playbook is clear: slashing a critical resource that Americans have rightfully earned to give another tax cut to the top 1%. Democrats won’t let their reckless attacks stand, and we will continue to defend and protect Social Security and Medicare for generations to come.”

Rhode Island Congressmen were quick to give their comments about the release of the two trustee reports, too. “Unlike the nearly three-quarters of House Republicans who endorsed slashing Social Security in 2022 – reducing benefits by $729 billion over 10 years – House Democrats are working to protect Social Security for generations to come,” says Congressman David N. Cicilline, representing Congressional District 1.  Cicilline, who is retiring his seat on May 31, 2023, has pushed to expand and strengthen Social Security over his six-terms in office.

Cicilline asks: “Sixty-six million Americans rely on this essential program to make ends meet and we cannot allow Republicans to make any cuts to this hard-earned benefit. The drug spending savings implemented by our Inflation Reduction Act will not only keep money in seniors’ pockets but will also drive down costs to Medicare itself. We’ve been taking real action to strengthen these programs and help our seniors – what have Republicans done?”  

As Rhode Island’s newly elected Congressman, Seth Magaziner says he will “fight tooth and nail to protect Rhode Islander’s hard-won Social Security benefits.”   In responding to the trustee’s report about Social Security’s financial woes, Magaziner called for raising the cap on Social Security taxes, forcing “millionaires and billionaires to pay the same rate as teachers and fire fighters.”

“I stand ready to work with anyone who is serious about strengthening Social Security, not cutting hard-earned benefits,” says Magaziner. 

While there are few fixes being proposed by either party or leader, some fixes identified by the Program for Public Consultation at the University of Maryland that “Americans might be willing to support” include:

–        raising the Social Security payroll tax cap

–        reducing benefits for high earners

–        gradually raising the retirement age

–        increasing the payroll tax

–        raising the minimum benefit

–        changing cost-of-living adjustment calculations

–        increasing benefits for beneficiaries over age 80

Social Security advocacy group gives its two cents

“Contrary to conservative claims, Social Security is not ‘going bankrupt’; the program will always be able to pay benefits because of ongoing contributions from workers and employers. In fact, this is yet another Trustees report showing that Social Security remains strong in the face of turmoil in the rest of the economy,” says Max Richtman, NCPSSM’s President and CEO in a release on the Social Security Trustee Report. He notes that the program’s insolvency date has stayed roughly the same even after a global pandemic and recent economic upheavals. 

Congress can strengthen Social Security by bringing in additional revenues into the program, says Richtman.  NCPSSM endorses legislation introduced by Senator Bernie Sanders (D-Vermont) and Congressman John Larson (D-Connecticut) to keep the trust fund solvent for the rest of this century while expanding program benefits.  Both bills would adjust the Social Security payroll wage cap so that higher-income earners begin contributing their fair share, he notes.

As to Medicare, in a release Richtman called on Congress to take “pre-emptive action now” to protect the Medicare Part A trust fund from becoming depleted in 2031, three years later than estimated in their previous report, at which time Medicare could still pay 89% of benefits.  

“Beyond trust fund solvency, the Trustees reported that the standard Medicare Part B premium will rise next year to $174.80 per month – a $10 or six percent monthly increase,” says Richtman. “Any increase is a burden to seniors living on fixed incomes, who too often must choose between paying monthly bills or filling prescriptions and getting proper health care.  Seniors need relief from rising premiums and skyrocketing out-of-pocket health care costs,” he said. 

“We support President Biden’s plan to strengthen Medicare’s finances, as laid out in his FY 2024 budget.  His plan would bring more revenue into the program, rather than cutting benefits as some Republicans have proposed.  Building on the prescription drug pricing reforms in the Inflation Reduction Act, the President’s budget proposal would lower Medicare’s prescription drug costs — and some of those savings would be used to extend the solvency of the Part A trust fund,” said Richtman.

For a copy of the 2023 Social Security Trustee Report, go to https://www.ssa.gov/OACT/TR/2023/.

For a copy of 2023 Medicare Trustee Report, go to https://www.cms.gov/oact/tr/2023.

Social Security has new, easier to use website

Published in RINewsToday on January 30, 2023

Over a month ago, the U.S. Social Security Administration (SSA) launched a redesigned website to assist beneficiaries to find what they need more easily. New pages and improvements based on public feedback will continue to be unveiled in the coming months. You may have already received an email to check out your new personal account page, though not everyone has yet.

“SSA.gov is visited by over 180 million people per year and it is one of our most important tools for providing efficient and equitable access to service,” said Kilolo Kijakazi, Acting Commissioner of the Social Security Administration, in a December. 6, 2022 statement announcing this redesign. “Whether providing service in person or online, our goal is to help people understand what they may qualify for and seamlessly transition them to an application process.” Improved self-service capability allows people to skip calling or visiting an office, which helps Social Security staff focus on those visitors who need in-person assistance,” she says.

Kijakazi noted that the redesign will make it easier to do business with the federal agency. “Its redesign is intended to provide a clear path to the tasks customers need to accomplish,” she said, noting that many of the most visited sections of SSA.gov are now live with a more user-friendly and task-based approach.

According to SSA, visitors to SSA.gov can use interactive tools to check eligibility for benefits.  The screener is a convenient and simple way for people to learn if they might be eligible for benefits.

Beneficiaries can also save time on Social Security Number (SSN) and card online services, too.  If a beneficiary loses their SSN card, they may not need a replacement. In most cases, simply knowing their SSN is enough. If a person does need a replacement card, they may be able to request a replacement online by visiting www.ssa.gov/ssnumber.

Individuals can also start an application for an updated card or request an SSN for the first time. People may never need to visit an office and, if they do need to visit an office to complete the application, they will save a lot of time by starting online.

People can also apply for Supplemental Security Income (SSI) benefits on line by starting an application and requesting an appointment to apply for SSI benefits by just answering a few questions at www.ssa.gov/benefits/ssi/.

Finally, for most benefits, people can apply online or start an application online. In many cases, there are no forms to sign. The agency will review the application and reach out with questions or for more information. Visit www.ssa.gov/onlineservices to apply for retirement, disability, or Medicare.

Many Social Security services do not require the public to take time to visit an office. Using a my Social Security account, a personalized online service, people can start or change direct deposit, or request a replacement SSA-1099. For individuals already receiving Social Security benefits, they can print or download a current Benefit Verification Letter if they need proof of their benefits.

People not yet receiving benefits can use their online account to get a personalized Social Security Statement, which provides their earnings information as well as estimates of their future benefits. The portal also includes a retirement calculator and links to information about other online services. SSA encourages people without a my Social Security account to create one today at www.ssa.gov/myaccount/. This part of the site is operational 5am to 1am, Monday through Friday – 5am to 11pm on Saturday – 8am to 11:30pm on Sunday.

One thing pandemic times have done is make us more proficient in the computer and using online services, and those who run official sites have focused on making them simpler, and easier to use.

Trustee Reports predict improved outlook for Social Security and Medicare

Published in RINewsToday on June 6, 2022

On June 2, 2022, following a meeting of the Social Security and Medicare Boards of Trustees, the Social Security Administration (SSA) – joined by the Departments of Health and Human Services and Labor, the Centers for Medicare & Medicaid Services, and the U.S. Department of Treasury — released a 275-page annual report giving us a snapshot of the financial health of the Social Security Trust Funds.

The Trustee reports findings

According to this year’s Trustee Reports, “Social Security and Medicare both face long-term financing shortfalls under currently scheduled benefits and financing. Costs of both programs will grow faster than gross domestic product (GDP) through the mid-2030s primarily due to the rapid aging of the U.S. population. Medicare costs will continue to grow faster than GDP through the late 2070s due to projected increases in the volume and intensity of services provided.”

The Social Security Trustees report that the combined asset reserves of the Old-Age and Survivors Insurance and Disability Insurance (OASI and DI) Trust Funds, paying benefits to 65 million retirees, disabled people as well as survivors of deceased workers, are projected to become depleted in 2035, one year later than projected last year, with 80 percent of benefits payable at that time. The DI Trust Fund asset reserves are not projected to become depleted during the 75-year projection period.

“It is important to strengthen Social Security for future generations. The Trustees recommend that lawmakers address the projected trust fund shortfalls in a timely way to phase in necessary changes gradually,” says Kilolo Kijakazi, Acting Commissioner of Social Security in a statement announcing the released report. “Social Security will continue to be a vital part of the lives of 66 million beneficiaries and 182 million workers and their families during 2022,” she adds.   

The Medicare Board of Trustees note in its 263 page report that the projected depletion date for Medicare’s trust fund for inpatient hospital care (Part A), covering around 64 million retirees and disabled persons, moved from last year’s forecast of 2026 to 2028. At this time Medicare will only be able to pay 90% of the scheduled benefits when the fund is depleted.

“We are committed to running a sustainable Medicare program that provides high quality, person-centered care to older Americans and people with disabilities,” said CMS Administrator Chiquita Brooks-LaSure. In a statement “Medicare trust fund solvency is an incredibly important, longstanding issue and we are committed to working with Congress to continue building a vibrant, equitable, and sustainable Medicare program,” she says.

Thoughts from senior advocacy groups

In a statement, AARP CEO Jo Ann Jenkins said that this year’s Social Security and Medicare Trustee report sends this clear message to Congress: “The Social Security and Medicare Trustees’ reports should send this “clear message” to Congress: “Despite the short-term improvement, you must act to protect the benefits people have earned and paid into both now and for the long-term. The stakes are too high for the millions of Americans who rely on Medicare and Social Security for their health and financial well-being.”

“These reports also underscore the urgent need for Congress to pass legislation allowing Medicare to negotiate for lower prescription drug prices, which would result in billions of dollars of savings for seniors, the Medicare program, and taxpayers,” says Jenkins.

Jenkins also calls on Congress to increase funding to fix serious long-time Social Security customer service problems, which currently impede or keep seniors and people with disabilities from getting their benefits in a timely manner.

Following the release of the Trustees Report, Executive Director Alex Lawson, of the Washington, DC-based Social Security Works, (SSW) a social welfare organization that lobbies for Social Security Reforms, also issued a statement: “Today’s report shows that our Social Security system remains strong. Protecting and expanding benefits is a question of values, not affordability. That this year’s projections are even stronger than last year’s proves once again that Social Security is built to withstand times of crisis, including pandemics.”

We don’t have a Social Security crisis, but we do have a retirement income crisis. With prices rising, seniors and people with disabilities are struggling to afford food and medicine. The solution is to expand Social Security,” says Lawson. 

According to SSW, the 2020 Social Security Trustee’s Report reported that Social Security has an accumulated surplus of about $2.85 trillion.  It projects that, even if Congress took no action whatsoever, Social Security not only can pay all benefits and associated administrative costs until 2035, it is 90 percent funded for the next quarter century, 84 percent for the next half century, and 81 percent for the next three quarters of a century.  

“At the end of the century, in 2095, Social Security is projected to cost just 5.86 percent of the gross domestic product (“GDP”), less than most other wealthy countries spend on their counterpart programs,” says SSW.

Max Richtman, President and CEO of the Washington, DC-based National Committee to Preserve Social Security and Medicare (NCPSSM), throws in his two cents about this year’s Trustee Report. “The takeaway from the latest Social Security Trustees report is this:  Congress must strengthen the program’s finances without delay. The Trustees project that the combined Social Security retirement and disability trust fund will become depleted by 2035, one year later than projected in their previous report. At that point, every Social Security beneficiary will suffer a 20% cut to their benefits.”

“Seniors struggling to meet rising living expenses need Social Security to be boosted and strengthened. The pandemic, runaway inflation and devastating stock market losses serve to remind us how vital a robust Social Security program is to workers, retirees, the disabled and their families. The clock is running down. The time for fair, just, and equitable action that safeguards Social Security’s financial stability is now,” adds Richtman.   

While acknowledging that the trust fund insolvency date may fluctuate from year to year, the urgent need to boost the program’s financing and benefits remains consistent, says Richtman. 

NCPSSM’s Richtman says, over the years, the GOP has opposed the expansion and strengthening of Social Security and has called for raising the retirement age, privatization, and more recently, ‘sunsetting’ Social Security and Medicare every five years.  He calls for passage of Rep. John Larson’s Social Security 2100: A Sacred Trust legislation that would extend trust fund solvency by requiring high wage earners to contribute their fair share through an adjustment in the payroll wage cap. 

A Washington Insider says that House Speaker’s Nancy Pelosi (D-CA) policy staff are concerned about the cost of Larson’s Social Security fix legislation and are seeking a CBO cost estimate. At press time this measure has more than 200 Democratic cosponsors in the House. The Congressional Asian Pacific American Caucus (CAPAC), Congressional Black Caucus (CBC), the Congressional Hispanic Caucus (CHC), the Task Force on Aging and Families, and the Congressional Progressive Caucus have all called on Pelosi to bring the bill to the House floor for a vote.

“Thanks to the American Rescue Plan, our economic recovery has strengthened both the Social Security and Medicare Hospital Insurance Trust Funds and improved financial projections for these vital programs. But to ensure that every American worker, senior, child, and person with disabilities receives the necessary and earned benefits provided by both Social Security and Medicare, we need to act. That’s why I am an original cosponsor of legislation like Social Security 2100: A Sacred Trust, to not only enhance benefits for seniors and some of our most vulnerable neighbors, but to also guarantee access to these programs for generations to come,” said Congressman David Cicilline, (D-RI).  

Congress can step in to financially strengthen the Social Security and Medicare programs. A message from the Social Security and Medicare Boards of Trustees suggest Congress pass legislation to reduce or eliminate the long-term financing shortfalls in both the Social Security and Medicare. “Taking action sooner rather than later will allow consideration of a broader range of solutions and provide more time to phase in changes so that the public has adequate time to prepare,” say the Trustees.

Congress should look for “medium-term solvency” fixes to ensure that Social Security program can pay full benefits for several decades rather than for the full 75-year projection period, suggests Paul N. Van De Water, Senior Fellow at the Washington, DC-based Center for Budget and Policy Priorities, a nonprofit nonpartisan research organization and policy institute that conducts research on government policies and programs. “But shoring up the program’s financing for a substantial period of time is important for assuring both current and future beneficiaries that Social Security will be there for them in the years to come,” he says.

At a crossroad

NCPSSM’s Richtman believes Social Security’s future is now at a crossroads. “We can either cut benefits or expand benefits and pay for it by requiring the wealthiest to pay their fair share,” he says, calling on Congress to hold an up or down votes on Larson’s Social Security legislation.

Polling shows that voters support fixing Social Security and Medicare. Seniors may well go to the polls, sending a message with their vote that strengthening and expanding Social Security is important to them.   

For a copy of the 2022 Social Security Trustee Report, go to https://www.ssa.gov/OACT/TR/2022/tr2022.pdf. For a copy of the 2022 Medicare Trustee Report, go to https://www.cms.gov/files/document/2022-medicare-trustees-report.pdf