This short diary analyzes the ever-changing year of medicare insolvency as projected by recent Trustees Reports, the result of which is the actual best guess we can produce of when Medicare will become insolvent.
A few authors have recently noted that claims of Medicare imminently going bankrupt aren't just a recent phenomenon, but in fact have been consistent throughout its history. The first author to do so recently (to my knowledge) is Eric Zorn at the Chicago Tribune, and his piece is one of the most comprehensive when it comes to cataloging such predictions. Jared Bernstein mentioned the same subject today Here's just a sampling of such projections, assembled by the Center on Budget and Policy Priorities but stolen from Jared Bernstein:
One thing that I notice about all such mentions is that the authors' analyses never go any further than to cast doubt about such predictions.We can go further, though, as I will attempt now:
The Medicare Trustees are considered to be one of the best organizations at projecting the insolvency of Medicare, and they publish such projections yearly while largely maintaining a consistent methodology. One thing that we can say with confidence is that, even though their methodology has gotten the year of insolvency incorrect every year prior to 1999 (and likely every year since), their methodology isn't so flawed that it would continue to project the date of insolvency into the future even after it has passed.
The meta-analysis to be performed, then, is to predict which year their future reports will peg as the year medicare goes insolvent, and we can do this simply by taking the expectation value of the trend given their previous projections, i.e. by performing a linear extrapolation. That produces the following:
As can clearly be seen by the divergence of the projection and year lines, we should expect the number of years until insolvency to increase with time, meaning, since they would never project into the future an insolvency that had already happened, that we should expect Medicare insolvency to never occur.
So, please remember when discussing this issue in the future that the best we can figure from the Medicare Trustees reports is that Medicare will never go insolvent, and anyone saying otherwise based on such reports is ignoring the history of those very same reports.