Levin, McDermott, Becerra Statements on Medicare and Social Security Trustees Reports

Press Release

Ways and Means Ranking Member Sander Levin (D-MI), Health Subcommittee Ranking Member Jim McDermott (D-WA) and Social Security Subcommittee Ranking Member Xavier Becerra (D-CA) today responded to the release of the 2014 Medicare Trustees Report and 2014 Social Security Trustees Report. The 2014 Medicare Trustees' Report projects a solvency date of 2030, a four-year improvement from last year's report. The 2014 Social Security Trustees' Report projects continued stability, with the same solvency date as projected in last year's report, 2033.

Ways and Means Committee Ranking Member Levin: "It is no coincidence that Medicare's financial outlook has improved dramatically in the last five years. The Affordable Care Act has significantly slowed the growth in health spending nationwide. That development has been lost on Republicans, who remain obsessed with tearing apart the health law and ending the Medicare program as we know it. The Social Security Trustees report underscores that the program remains strong, with its long-term future presenting a manageable challenge that must be addressed while preserving Social Security as a foundation of financial security for the millions of current and future seniors, disabled workers, and children who need it. Republicans need to stop standing in the way of policies that would grow our economy and grow Social Security by helping more people work, earn more, and contribute more to Social Security."

Health Subcommittee Ranking Member McDermott: "Today's Trustees report provides encouraging news for the Medicare program. Thanks in no small part to the reforms made by the Affordable Care Act, growth in national health spending has slowed dramatically. We have also reduced wasteful overpayments to private sector plans, while improving benefits for seniors. The Medicare program's outlook continues to improve year after year and these improvements have placed Medicare on a stronger financial footing -- extending the program's solvency to 2030. This is four years longer than the previous Trustees report. Moving forward, we must address the issue of costs through innovative reforms that reduce waste in the healthcare system without harming beneficiaries. Now more than ever, we must reject radical proposals to turn Medicare into a voucher program. We must work to ensure that the program remains strong for generations of American seniors to come."

Social Security Subcommittee Ranking Member Xavier Becerra: "Over the course of 79 years and 13 recessions, Social Security has kept its promise to pay seniors, widows, disabled workers and children their earned benefits, on time and in full. Today's report shows that over Social Security's lifetime, it has raised $17.2 trillion and paid out $14.4 trillion, leaving a current trust fund balance of $2.8 trillion to help support future benefit payments. In the near-term, the most serious risk Social Security faces is the impact of four years of Republican budget cuts, which have resulted in local office closings and staff shortages, long wait times on the phone and in person, and growing backlogs of Americans waiting for their earned benefits."

KEY TAKEAWAYS FROM THE 2014 MEDICARE TRUSTEES REPORT

The Affordable Care Act Substantially Improved Medicare's Solvency. The 2014 Medicare Trustees Report projects a solvency date of 2030, a four-year improvement from last year. In sharp contrast, the Republican agenda to repeal the ACA would slash years from the program's solvency, accelerating the date of insolvency by eight years according to the last estimates prepared by the Office of the Chief Actuary (2012). The ACA took many steps to strengthen Medicare's fiscal outlook, including removing overpayments to private Medicare Advantage plans, improving provider payment accuracy, encouraging better coordination of care to minimize duplication of tests and improve outcomes, and empowering CMS with new tools to fight health care fraud.

Strengthened Long-Term Fiscal Situation Thanks to Reform. Medicare's long-term 75-year deficit is also dramatically improved, dropping from 3.88 percent before ACA's enactment to 0.87 percent now -- this means that the 75-year deficit can be closed with revenue increases or spending cuts (or a combination thereof) equivalent to a 0.87 percent increase in the payroll tax. This improvement in the program's financial outlook is due to lower than expected 2013 spending for Medicare Part A services especially inpatient hospitalizations, lower utilization assumptions for inpatient hospitalizations, and lower case mix assumption for skilled nursing facilities and home health agencies. In sharp contrast, the Republican agenda to repeal the ACA would dramatically worsen Medicare's finances. The Medicare actuaries projected in 2012 that if the ACA were repealed, eliminating the 75-year deficit would require a more than doubling of the payroll tax from 2.90-percent to 6.33 percent, or a significant reduction in expenditures.

House Republicans Will Politicize Trustees Report to Raise Beneficiary Costs. Republicans will likely seize on the 2014 Trustees Report to justify their plans for Medicare benefit redesign, which would dramatically raise cost-sharing for beneficiaries. Half of all Medicare beneficiaries have incomes below $22,500, yet Republicans want to shift costs onto this population in the name of saving Medicare, despite the dramatic improvements made since the passage of the ACA. Republicans will tout that similar policies were proposed in the President's budget, but those budget proposals were in the context of a big deficit reduction package that included shared sacrifice with both spending cuts and revenue increases. Those proposals are not to be cherry-picked and do little to slow spending growth; they are merely cost-shifts. Republicansare not newcomers to the strategy of politicizing the Trustees Report in order to advance a plan to cut Medicare.

KEY FACTS ON SOCIAL SECURITY BUDGET CUTS AND SERVICE DELIVERY IMPACT:

-Number of Americans receiving Social Security: 54 million in 2010 vs. 58 million in 2014 (+4 million)

-Total Social Security operating budget: $11.3 billion in 2010 vs. $10.5 billion in 2014 (-$800 million)

-Social Security staff: 73,000 in 2010 vs. 62,000 in 2014 (-11,000)

-Hours Social Security offices are open to the public: 35 in 2010 vs 27 in 2014 (-20 percent)

-Percentage of time the Social Security 800 number is busy: 8 percent in 2010 vs. 14 percent in 2014 (1.75X more likely to get a busy signal)

-Number of days disability applicants wait for a decision from an Administrative Law Judge : 340 days in 2011 vs. 415 days in 2014 (+75 days)

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