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Child's hand grasping old person's hand.
The case for cutting Medicare and for repealing Obamacare is getting worse and worse all the time. This week's installment of bad news for the would-be cutters and repealers: the Medicare trustees' report, showing an improved outlook for the federal health program.
Medicare’s financial health is improving, according to a new official forecast that says that the program will remain solvent until 2030—four years later than anticipated a year ago—because of the Affordable Care Act and lower-than-expected spending on hospital stays.
For the more visually inclined, here's a chart showing how the life of the program has been extended over the past five years, courtesy of White House healthcare advisor Tara McGuinness.
Bar chart showing increasing strength of Medicare's financing sine 2009.
Healthcare spending continues to slow, a likely combination of the reforms in Obamacare and a still sluggish economy. But there's little question that the program reforms in Obamacare are a very real factor in these savings, and in strengthening the program.

The trustees also found little changes in the outlook for Social Security, estimating it is completely solvent until 2033, the same as last year's prediction, absent any changes to the program. The program has a large and growing surplus of $19.3 billion for 2014. Bottom line, neither program is in imminent danger of collapse, and neither program needs to be subjected to benefit cuts in order to save it. There's plenty of time for smart solutions to extend the lives of the programs beyond the next two decades that won't hurt retirees.

Originally posted to Joan McCarter on Mon Jul 28, 2014 at 01:14 PM PDT.

Also republished by Social Security Defenders and Daily Kos.

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Comment Preferences

  •  Tip Jar (37+ / 0-)

    "The NSA’s capability at any time could be turned around on the American people, and no American would have any privacy left, such is the capability to monitor everything. [...] There would be no place to hide."--Frank Church

    by Joan McCarter on Mon Jul 28, 2014 at 01:14:27 PM PDT

  •  Great news! (11+ / 0-)

    And of course the GOP will be delighted, since they are so concerned both with the health of the program and the Federal deficit.

  •  A sure way to fix Medicare for good would be to (10+ / 0-)

    elect Democrats.
       If we control both Houses of Congress, we could pass further health care reform measures to shore up the system.

    "We the People of the United States...." -U.S. Constitution

    by elwior on Mon Jul 28, 2014 at 01:53:24 PM PDT

  •  Congress could always bite the bullet and (2+ / 0-)
    Recommended by:
    Amber6541, sulthernao

    define health and pensions as necessary as defense and allocate the dollars as needed.
    Of course, admitting that the dollar has no value, other than as an official IOU, would undermine decades of myth-making and denial of responsibility for the rationing and the short-changing.

  •  Guaranteed income/insurance for everyone (2+ / 0-)
    Recommended by:
    TofG, hbk

    Under 18 and over 62.

    Wait . . . That would just breed dependence among dependent children!!  Oh noes!

    A drowning man can not learn to swim. -- Chris Lonsdale

    by Rikon Snow on Mon Jul 28, 2014 at 04:03:27 PM PDT

  •  In what world except the US are dental, vision, (2+ / 0-)
    Recommended by:
    TofG, HDTVGuy

    and hearing not part of healthcare/Medicare?

  •  ACA improves medicare solvency. (Checking with (0+ / 0-)

    House Republicans)... Yep. Clear grounds to impeach the President.

  •  One caveat. (0+ / 0-)
    There's plenty of time for smart solutions to extend the lives of the programs beyond the next two decades that won't hurt retirees.
    Likely presumes a Democratic President and both chambers of congress, along with the political fortitude to act, rather than kicking this can down the road.
  •  On Wednesday we have a Medicare birthday... (4+ / 0-)
    Recommended by:
    Samer, TofG, hbk, vigilant meerkat

    ...demonstration to celebrate the 49th birthday of Medicare.  Last night I went to a salon where the topic was Medicare for All (Single Payer).  One of the speakers was Michael A. Hiltzik who wrote a book on the history of the New Deal.  His bottom line is that the opposition to Social Security, Medicare and now Obamacare and eventually Single Payer by state is ideological.  An ideology that believes that if you get sick, old or loose your job you are on your own.  IMO the influence of Ayn Rand's dystopia is the best expression of this ideology, the anti-thesis of the ideology that says we can accomplish things together and we are our brother's keeper.

    Daily Kos an oasis of truth. Truth that leads to action. UID: 9742

    by Shockwave on Mon Jul 28, 2014 at 04:18:23 PM PDT

    •  Mike Hiltzik also about only MSM reporter (2+ / 0-)
      Recommended by:
      hbk, Shockwave

      who gets this.

      Hiltzik is a lead economics reporter and editorial writer for the LA Times which due to him is just about the only paper of record that gets this topic right. To which the polar opposite is the WaPo whose econ columnists are Peter G Peterson shills (literally, story for another time).

      If it weren't for Mike and Herr Prof K and to some degree Dean Baker the whole idea that SocSec is defensible might as well not exist in the print press.

      SocSec dot.Defender at - founder DK Social Security Defenders Group

      by Bruce Webb on Mon Jul 28, 2014 at 04:31:41 PM PDT

      [ Parent ]

  •  This is news to me (0+ / 0-)

    I have seen so many news stories about how the republicans want to gut Obamacare and even repeal it but I can't remember any stories about cutting Medicare.  I mean, Medicare is funded by a specific tax designated to go toward that fund.  Would it actually be legal to cut it?  Oh, well...yeah, I know that the "lock box"  Social Security fund has been raped big time over the years, but I haven't seen much about actually taking away from Medicare.

    •  Medicare only 55% financed by that specific tax (1+ / 0-)
      Recommended by:

      with another 12% or so by beneficiary paid premiums.

      The rest comes out of the General Fund. Hence the so-called 'Doc Fix' which has come up every year since forever. Under current law the General Fund is only supposed to be on the hook for so much of Medicare Part B (Physicians) and when that limit is approached (which it has been every year) they have to put in the 'Doc Fix' after the fact.

      So yes failure to perform the 'Doc Fix' would have been a perfectly legal way to cut Medicare benefits. From that part of Medicare NOT funded by that specific tax.

      SocSec dot.Defender at - founder DK Social Security Defenders Group

      by Bruce Webb on Mon Jul 28, 2014 at 10:27:51 PM PDT

      [ Parent ]

  •  Suck on this truth, Privat-ization Ryan (0+ / 0-)

    That's you, voucher-care pseudo-wonk Ayn-Rand-hugger Paul Ryan.

  •  Joan! (1+ / 0-)
    Recommended by:

    Really Nice article... But the Picture is Fantastic!  I LOVE it!!!

  •  But, but...must give all your $ to WallSt. now! (0+ / 0-)


    After all, if not-rich people get $, a goblin dies.

  •  Another way the ACA (0+ / 0-)

    should help, is that fewer people will put off dealing with the medical issues until they hit Medicare eligibility.  And I know quite a few early boomers who did just that.  Now if the insurance companies make the copays and deductibles too high this wont happen.

    Democrats give you the Bill of Rights; Republicans sell you a bill of goods!

    by barbwires on Mon Jul 28, 2014 at 05:16:57 PM PDT

  •  This really frustrates (0+ / 0-)

    The problem with all this “good news” is it helps keep alive the false narrative that there actually are federal trust funds that will run out of money.  How can a gas tank "run out" if there is no gas tank?  There's no bank where payroll taxes are being saved; it’s not being hidden under mattresses or buried under the Mall in DC.  There is no "saved" money.  It is simply pieces of paper, IOUs,  held in a file cabinet in Akron Ohio.  These pieces of paper differ only from US Treasuries in that they are not marketable to the public.    They have the exact same fundamental backing  - "the full faith and credit of the United States."

    Regardless of how many pieces of paper are in the file cabinet or how many zeros on each piece, paying SS or Medicare benefits (or, any other federal spending) is nothing but a political choice.  The only economic consideration is whether that spending,, when added to all other US dollar spending (private or public, domestic or foreign) either (a) exceeds the world’s economy to supply and we get upward pressure on prices (i.e., inflation) or (b) is insufficient to mop up all supply and we  get downward pressure on prices (e.g. deflation).  No one can predict what the stock market will do tomorrow let alone predict whether we will have inflation or deflation 10, 20, 30 years from now.

    Progressive need to break out of this false framing that there are trust funds that can run out.  All federal payroll taxes should be cut and all federal safety net spending increased; if inflation results, then add back some taxes and cut some of the spending until it abates.  If inflation falls below a desired level (note – some level of inflation is needed for a healthy growing economy; the FED pegs that at 2%), then cut federal taxes even more and raise federal spending.

    Cut the taxes and raise the spending dollar for dollar so everyone wins.  Those who want less taxes win.  Those who want more spending win.  Those afraid of inflation win because it becomes the gate keeper.

    The only ones who really loss are the ones who want to hold everyone within the false framing.  Any guess who wants the myth to hold sway and why?  More importantly, why do let them keep you fixated by the myth?

    Wake up and think.

    •  Vigilance (0+ / 0-)

      At this rate -- each new year buys us an extra four years -- it's not long until we'll see renewed pressure to reduce or even eliminate the Medicare tax that was passed in the Obamacare legislation.

      This tax must be defended at all costs.  It's probably the biggest single step we've seen to reverse the tax giveaways to the rich of the Reagan era and beyond; it supports Medicare, it helps the middle class, it reduces "overhangs" of capital and thus reduces the frothiness of the stock market, it is good policy on so many different levels.  But it is also politically vulnerable for one very simple reason; it's the first time in the US, and one of the very few times anywhere, that a legislature has passed a payroll tax for a social insurance program that was not capped, but instead levied with no upper limit.  There's really no good way of substituting it, it is producing excellent results, and it represents probably the biggest single piece of fiscal progress of the Obama presidency.  So we become aware of it and we stand up for it.

      •  If we remain stuck (0+ / 0-)

        in the masters' paradigm that federal spending must be constrained due to deficits/debt, then I would agree with you.

        Essentially, you want to tax people because you want an electronic spreadsheet at the FED to add up to a smaller number for something called "deficit" - it's by and large a meaningless number except as a weak indicator of possible future inflation or deflation (but no more so than the spending by the private sector or state/local govts).

        You get to keep the "false flag" 'victory' of taxing the rich, the masters get to keep downward pressure on federal spending... including the possible eventual demise of these programs because, oh my, they're just "so expensive."

        Believing in their false paradigm, even with the occasional victory,  comes at great costs... almost unimaginable costs.

        •  Paradigms, paradigms (0+ / 0-)

          You're stuck in one, big time.

          And if it goes on basically being acceptable for the very rich in this country to pay only 13 to 17 percent in effective tax, it will go on being very difficult to achieve broad-based social and economic improvement, because it won't require a three percent deficit, it will require more like five to ten, which is not sustainable.  If taxes that break the barriers against public sector tapping of this important resource are cheaply expendable to you, you're part of the problem, not part of the solution.

  •  why health care spending is declining (0+ / 0-)

    people are overly focused on the aca and are missing other trends in health care that are as important or more so. Currently, the bulk of the us physician work force is moving from self employed models to institutional models. There are many reasons for this but the incentive to do more work and for self referral is much less. Institutions also control costs much better than individuals. This is a major force that will continue and is happening almost without notice because of politics and the aca.  

  •  Each new year buys us an extra four years (0+ / 0-)

    That's math I like!  At that rate, Medicare is a safer bet than almost anything else.  Thanks, Obamacare!

  •  Want to improve Medicare's finances even more? (0+ / 0-)

    Lower the Medicare age to 55.

    Thanks a lot Joe Lieberman!

    Counting stars by candlelight...

    by frasca on Mon Jul 28, 2014 at 06:57:01 PM PDT

    •  How does that improve Medicare's finances? (0+ / 0-)

      Not to say that it isn't a good idea. But it ignores the way Medicare is actually financed today, both Part A and its payroll tax funding, and Parts B and D that are 75% funded from the General Fund.

      It works this way. Every employed person 55-65 pays SECA which payroll tax goes into the HI Trust Fund (along with contributions from younger workers) to pay for Medicare Part A Hospitals for people 65 and older. If we add 55-65s to Part A there SECA would have to be reserved to pay for THEIR OWN Hospital Insurance and so taking away a source of cash for the existing 65 and olders. Or else they would have to CONTINUE to pay SECA into the HI Trust Fund for the 65+ and then double up with premiums to fund their own HI. The math doesn't work.

      One source of confusion is the Medicare Premium most recipients pay. But that premium only funds a portion of Parts B (Doctors) and D (Physicians) and only a small part of the remainder is made up by co-pays. Instead fully 75% of B and D are paid from the General Fund which makes up around 40% of total Medicare. Adding a new pool of 55-65 year olds simply increases the needed transfers from the GF to the SMI Trust Fund (which funds B and D).

      Now you could get around this a little bit by letting this new pool buy into Medicare B and D AT FULL PRICE but this would make their Premiums 4x as large as the 65+ folk. And still not begin to address the issue of funding Part A alluded to above.

      While it is more or less true that people pay for their own Medicare over the course of their work life, it is not like those dollars get earmarked for their own care, Part A is still paid for on a Pay-Go basis by current workers to current beneficiaries. And you can't just pluck a whole decade of folks from the former category and dump them in the latter without coming up with new funds to compensate for SECA contributions that were going to that older cohort.

      On the other hand Joe Lieberman is scum. But that is for blocking the Public Option. Which has relatively little to do with either Medicare Buy-In for 55-65 year olds or the Medicare for All Plan. We should not confuse what are very different policy options with very different financing mechanisms.

      SocSec dot.Defender at - founder DK Social Security Defenders Group

      by Bruce Webb on Mon Jul 28, 2014 at 10:22:38 PM PDT

      [ Parent ]

  •  Picking nits (0+ / 0-)

    The first bar would appear somewhat misleading. 2009 - 2017 would be 8 years, not 3. i have seen elsewhere a chart that it was 28 years or more when Clinton left office; so, Bush ran it down from 28 to 8. But, as a reality based community, the 3 years from present to 2017, is not the correct comparison to 2009.

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