WASHINGTON - the bad economy worsening already precarious finances of Medicare and social security, draining the trust funds that support faster than expected and the intensification of the massive need for Congress to shore up to benefit programsthe Government said Friday.
Medicare and social security are affected by a double whammy: the wave long expected retirement lower than anticipated received of tax, according to the annual report by the trustees who oversee programs and baby boomers.
Hospitals in Medicare for the elderly insurance fund is now planned for silver in 2024, five years earlier that last year's estimate. The social security trust funds should be drained in 2036, a year earlier than the last estimate. Once the trust funds are exhausted, these two programs can only collect enough money in payroll to pay partial benefits, said the report.
Immediate bad news for seniors: after they visited two years without increase in cost of living of the payments of social security, the Trustees of the project an increase of 0.7% for next year, an increase in so small that it will probably be destroyed by rising premiums for Medicare Part b for most of the beneficiaries.
"Can no longer be any doubt or denial: Medicare and social security of our country programmes are not viable and will operate money earlier than expected," said Senate Leader Republican Mitch McConnell of Kentucky. "."
Congress and the administration of Obama to negotiate possible changes to Medicare and other programs of benefits under an agreement to increase the capacity of the Government to borrow. The ceiling of $ 14.3 billion debt is affected Monday, although the Treasury Board officials to take measures to put off a default on the obligations of State August unprecedented, said the Secretary of the Treasury Timothy Geithner.
Congress is putting off changes to social security, but Medicare, the program of Medicare for older Americans Government, is still on the table.
Plu Congress expected to correct programs, it is more likely that lawmakers will be forced to impose deep benefit cuts, tax increases, or both, to save them, said the report. By acting early, the Trustees said that Congress may impose gradual changes that reduce the impact on the current beneficiaries and provide future retirees time to prepare.
"Financial gaps in social security and Medicare are considerable and - absent legislation to correct - sure," wrote two of the trustees who oversee programs, Charles P. Blahous III and Robert d. Reischauer. "" "". Elected officials will be better serve the interests of the public if financial corrections are adopted as soon as possible. ?
The weakness of the economy is hurting health insurance and social security because fewer people work and pay payroll taxes that support the programs, the Trustees said. Medicare is worse than social security, in part because it is also affected by the rising costs of health care.
To illustrate the challenges facing programs, the Trustees calculated tax increases or reductions in benefits that would be needed to make the two programs of solvent for the next 75 years.
Fixing social security would require an increase in the tax on the wages of 2.15 percentage points, or a reduction of 14 per cent immediate and permanent benefits, said the report. Fixation of the hospitals of the health insurance fund, should be an increase in tax on wages of almost 1 percentage point, or a cut by 17 percent in benefits.
If the benefit cuts are designed to reduce the impact on the current beneficiaries, future retirees will face even more significant changes, said the report.
However, if the health insurance fund is authorized to be drained, the program collect only enough payroll to pay about 90 percent of benefits. If the social security trust funds are drained, the program will collect only enough payroll to pay approximately 77 per cent of the benefits, said the report.
Nearly 55 million retirees, people with disabilities and children who have lost their parents receive from social security benefits, which average monthly $1,077. More than 46 million people are covered by health insurance.
Even after the economy comes back, Medicare will always be in difficulty. The reason is the cost of high-tech modern medicine. People live longer and have complicated procedures such as bypass later in life, surgery and hip replacements.
In addition, the financial projections for Medicare based in part on assumptions that the Trustees report say are obviously unrealistic or questionable. Those who understand the 1990 legislation which would require a 30% cut in payments to doctors and is routinely waived annually by Congress.
The report also raised questions about whether if cuts Medicare by virtue of the Obama health care system would be politically sustainable in the long term.
"It is important to note that actual future costs for health insurance are likely to exceed that indicated by the current-law projections in this report," said the Trustees.
Six administrators oversee social security and Medicare. In addition to Geithner, Blahous and Reischauer, the others are the Secretary of labor Hilda Solis, Secretary of health and Services Kathleen Sebelius, and Social Security Commissioner Michael Astrue.
