This week’s health policy news roundup curated by Jane Orient, M.D.
“The so-called ‘trustees’ of the social security system issued their annual report last week and the stenographers of the financial press dutifully reported that the day of reckoning when the trust funds run dry has been put off another year—until 2034,” writes David Stockman. “So take a breath and kick the can. That’s five Presidential elections away!”
Except, he continues, that is not what the report really says. “On a cash basis, the OASDI (retirement and disability) funds spent $859 billion during 2014 but took in only $786 billion in taxes, thereby generating $73 billion in red ink. And by the trustees’ own reckoning, the OASDI funds will spew a cumulative cash deficit of $1.6 trillion during the 12-years covering 2015-2026 [emphasis in original].”
Even this dismal prospect is based on unrealistic assumptions, including real GDP growth of 3.1% per year through the year 2020, instead of the recent average of 1.2%.
“In short, this year’s untrustworthies report amounts to an accounting and forecasting house of cards that is camouflaging an impending social, political and economic crisis of a magnitude not seen since the Great Depression or even the Civil War.” http://davidstockmanscontracorner.com/the-2015-untrustworthies-report-why-social-security-could-be-bankrupt-in-12-years/
Social Security and Medicare—America’s single payer for the elderly—are already paying out more than they are taking in. As the baby boomers retire, the total deficit will grow dramatically. Currently, we are using about one in every seven general revenue dollars to cover these deficits. By 2020, we will need more than one in five. By 2030, we will need about one in three, writes John Goodman.
The disability trust fund will “run out of money” (IOUs to redeem) by next year. Without congressional action, Treasury will only be able to pay 80% of promised benefits.
Buried in the Trustees’ Report and cleverly camouflaged is the current value of Social Security and Medicare debt (promises we have made minus expected premiums and dedicated taxes): $41.3 trillion over the next 75 years, $72.1 trillion on an infinite time horizon, and much more if Congress rescinds benefit cuts. http://www.forbes.com/sites/johngoodman/2015/08/07/how-much-do-we-owe-72-trillion-and-counting/
Where will government “find” the money? At the end of the rainbow? In your 401(k)? In your bank account?
It will not be in savings from the [Un]affordable Care Act or economic growth:
The Congressional Budget Office (CBO) estimates that repealing ACA would add 0.7% to the GDP, reports John Graham. http://news.heartland.org/newspaper-article/2015/07/16/repealing-obamacare-would-grow-economy-reduce-uninsured-10-million.
Does this mean that ACA is at least that much of a drag on the economy?
ObamaCare’s Medicaid enrollment explosion is a fiscal nightmare for states, especially when extra federal funding runs out in 2017. http://www.forbes.com/sites/theapothecary/2015/07/30/obamacares-medicaid-enrollment-explosion-a-looming-fiscal-nightmare-for-states/
ObamaCare continues to throw billions of dollars into dubious projects like PCORI, the Patient-Centered Outcomes Research Institute. http://www.publicintegrity.org/2015/08/04/17762/obamacare-research-institute-plans-spend-35-billion-critics-question-its-worth
As backstops for insurers expire, consumers will pay more and more. http://www.forbes.com/sites/theapothecary/2015/06/29/king-v-burwell-changes-little-obamacare-is-still-rife-with-problems/
ObamaCare has resulted in consolidation of insurers, greatly reducing consumer choices. http://www.forbes.com/sites/realspin/2015/08/05/healthcare-consolidation-leaves-consumers-with-fewer-choices-and-more-problems/
Seen on Social Media:
It’s Time To Look At Some of the Proprietary Code Running in US–Too Many Companies & Banks Are Playing “Techno-God” http://t.co/R8UNTdNfNy
— MedicalQuack (@MedicalQuack) August 8, 2015
Great piece by @ScottGottliebMD on health care inflation (5.8% vs 1.1% GDP growth); hospital mergers are at the heart http://t.co/TiKIpUYqHP
— Pritpal S Tamber (@pstamber) August 9, 2015
Medicare’s “Low” Administrative Costs: Fact or Fiction? http://t.co/l7jGKg2TZm via @forbes
— Rocky D. Bilhartz MD (@BilhartzMD) August 9, 2015
