July 31, 2015
PA Alliance Statement on Social Security and Medicare Trustees Reports
Current and future retirees can look forward to a secure Social Security and Medicare System
West Chester, PA – Wayne Burton, President of the Pennsylvania Alliance for Retired Americans, issued the following statement in response to the Social Security and Medicare Trustees Report issued this week.
“Retirees across Pennsylvania and across the nation rely on Social Security and Medicare to maintain their quality of life as senior citizens. These programs have lifted millions out of poverty in the past, and they will grow in importance for future generations as pensions become more rare and saving for retirement gets more difficult for so many working Americans. That’s why everyone, retirees and workers alike, should be glad about the latest Trustees Report on the finances of Social Security and Medicare.
“The best news comes on the Medicare side. Back in 2010, before passage of the Affordable Care Act, Medicare’s hospital trust fund was projected to be insolvent by 2017. Thanks to improvements to the program’s finances in that law, the trust fund gained seven years of solvency. Since then the situation has continued to improve. We have always said that Medicare didn’t have a funding problem – our country had a health care spending problem that was eventually going to make Medicare a casualty. But what we’ve seen in the past few years is a bending of the cost curve over the entire health care system. Medical cost inflation is at a half-century low thanks to factors like the affordable care act’s delivery system reforms that will help Medicare save $700 billion over 10 years and the fact that millions more people insured means less cost to the system. This year, despite the lack of any policy changes, the trust fund gained another four years of solvency thanks to this overall reduction in medical cost inflation.
“On the Social Security side, the trust fund’s solvency projections have stabilized. The Trustees again predict that Social Security’s Trust Fund will continue to grow until 2020, and will not deplete until 2033. The false narrative that Social Security is ‘broke’ doesn’t stand up to the evidence in this report. Social Security ran a surplus in 2013, just like it has every year for decades – even during the recession in 2008 and 2009. Social Security has a massive trust fund that contains safe US Treasury Bonds; bonds that paid Social Security over $100 Billion in interest last year.
“Of course, we can still do better. The Alliance advocates improving Medicare’s solvency by allowing Medicare to negotiate bulk pricing for prescription drugs under Part D, similar to the prices paid by the Veterans Administration. For Social Security, we hope to see solvency improved for good by scrapping the cap on taxable earnings so that every American pays the same rate into the system. If we enact common sense reforms like these, while avoiding bad ideas that cost seniors money like the chained-CPI COLA cut or the Ryan Budget’s voucherization of Medicare, our children and grandchildren will be able to count on these programs for generations to come.”
The Pennsylvania Alliance for Retired Americans, led by President Wayne Burton of Chester County, has over 300,000 members and 149 local affiliates across the Commonwealth. PARA’s mission is to educate seniors and the public about retiree issues, and organize seniors to advocate for their interests in Harrisburg and Washington. To learn more, visit www.pennretiredamericans.org.