Democrats and the political left are hammering Republicans on Medicare claiming gutting Medicare is being proposed to give the wealthy tax breaks. The fact is Republicans are doing what the Medicare Trustees have been urging for many years.
You can fairly argue about the proposed changes, but if you have ignored the problem year after year and continue to mislead Americans, your position is weak.
Read the following. We have three choices. We can continue to ignore the problem and let it get worse in terms of a depleted HI trust and growing costs as a percentage of GDP, we can simply raise taxes (and keep raising them) on working Americans 🤑 or we can seek structural changes for the long-term.
[🤑 Simply raising payroll taxes places the full burden on the younger generation]
To position attempts to address the problems as an attack on average Americans in favor of the rich is political propaganda and doing a disservice to all Americans. An honest opposition would acknowledge the issues as outlined by the Trustees and propose solutions for consideration.
Not every solution is simply raise taxes and keep raising them.
In 2016, HI income exceeded expenditures by $5.4 billion. The Trustees project modest surpluses to continue in 2017 through 2022, with a return to deficits thereafter until the trust fund becomes depleted in 2029. The assets were $199.1billion at the beginning of 2017, representing about 67 percent of expenditures during the year, which is below the Trustees’ minimum recommended level of 100 percent. The HI trust fund has not met the Trustees’ formal test of short-range financial adequacy since 2003 (as discussed in section III.B). Growth in HI expenditures has averaged 2.1 percent annually over the last 5 years, compared with non-interest income growth of 5.9 percent. Over the next 5 years, projected annual growth rates for expenditures and non-interest income are 5.7 percent and 5.8 percent, respectively.
For the 75-year projection period, the HI actuarial deficit has decreased to 0.64 percent of taxable payroll from 0.73 percent of taxable payroll in last year’s report. (Under the illustrative alternative projections, the HI actuarial deficit would be 1.76 percent of taxable payroll, compared to 1.85percent in last year’s report.) The 0.09 percent of payroll decrease in the actuarial deficit was primarily due to lower spending in 2016 and lower projected utilization of inpatient hospital services than were previously estimated.
The Trustees project that HI tax income and other dedicated revenues will fall short of HI expenditures in most future years. The HI trust fund does not meet either the Trustees’ test of short-range financial adequacy or their test of long-range close actuarial balance.
The Part B and Part D accounts in the SMI trust fund are expected to be adequately financed because premium income and general revenue income are reset each year to cover expected costs. Such financing, however, would have to increase faster than the economy to cover expected expenditure growth.
The financial projections in this report indicate a need for substantial steps to address Medicare’s remaining financial challenges. Consideration of further reforms should occur in the near future. The sooner solutions are enacted, the more flexible and gradual they can be. Moreover, the early introduction of reforms increases the time available for affected individuals and organizations–including health care providers, beneficiaries, and taxpayers–to adjust their expectations and behavior. 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.
Source: 2017 Trustees Report