In response to today's release of the Medicare and Social Security trustees' annual report, House Budget Committee Chairman Paul Ryan issued the following statement:
"In their latest report, the trustees of Medicare and Social Security warn that the health and retirement security of millions of seniors remains in jeopardy if these programs are left on their present course. Decades of empty promises from politicians refusing to be honest about the need for reform are threatening to become broken promises, with disastrous consequences for seniors. In the heart of their retirement, current seniors are scheduled to be hit with a 25 percent across-the-board benefit cut when Social Security's trust funds are exhausted. Meanwhile, Medicare's looming insolvency puts at risk the critical access to care that seniors have come to expect from this important program.
"Rather than work together to advance solutions, the President has opted to play politics with seniors' care. The President and his party's leaders continue to distort efforts to save and strengthen Medicare in an effort to distract seniors from the consequences of their health care law. The massive health care law raids over $500 billion from Medicare to finance a new health care entitlement, and hands Medicare's fate over to an unaccountable board of 15 unelected bureaucrats. This board of bureaucrats will be empowered to cut Medicare in ways that will result in restricted access and denied care for current seniors, while still leaving the program bankrupt for future generations.
"Seniors deserve better from President Obama. To prevent the President's empty promises from becoming broken promises, Medicare and Social Security -- critical programs designed in the mid-20th century -- must be strengthened for the 21st century. I remain committed to advancing principled, bipartisan reforms that fulfill the missions of these important programs."
Key findings from the Trustees' Report:
Social Security's 75-year unfunded liability equals $8.6 trillion. Medicare's 75-year unfunded liability equals $26.4 trillion. By refusing to advance sensible reforms, Washington is making tens of trillions of dollars of empty promises to Americans.
Social Security remains in a period of permanent cash deficits, with slower economic growth moving the looming bankruptcy date up to 2033. When its trust fund is exhausted, seniors can expect a 25 percent cut in their benefits.
The Social Security Disability Insurance (DI) trust fund is expected to go insolvent by 2016, jeopardizing assistance for Americans with disabilities.
Medicare remains on a collision course with the reality of demographics and health inflation, as the trustees warn that Medicare's Part A Trust Fund will reach insolvency in 2024. Absent reform, correcting Medicare's financial imbalance would require an immediate 26 percent benefit cut for current seniors or a 47 percent tax increase on workers.
This year's report includes another funding warning from Medicare's trustees, which triggers a requirement for the President to submit a plan to bring Medicare's finances into balance. President Obama continues to ignore his statutory requirement to strengthen Medicare's financial health.
Medicare's Chief Actuary Richard Foster again submitted an appendix to the report's finding, providing alarming context for Medicare's fate. Making clear the pain of price controls on government health programs, the following key passages can be found in Chief Actuary Richard Foster's Statement of Actuarial Opinion:
"By the end of the long-range projection period, Medicare prices for hospital, skilled nursing facility, home health, hospice, ambulatory surgical center, diagnostic laboratory, and many other services would be less than half of their level under the prior law."
"Medicare prices would be considerably below the current relative level of Medicaid prices, which have already led to access problems for Medicaid enrollees, and far below the levels paid by private health insurance."
"For these reasons, the financial projections shown in this report for Medicare do not represent a reasonable expectation for actual program operations in either the short range (as a result of the unsustainable reductions in physician payment rates) or the long range (because of the strong likelihood that the statutory reductions in price updates for most categories of Medicare provider services will not be viable)."