What You Need to Know about Today’s Medicare Trustees Report Release
Later today the Medicare trustees will release their annual report on the state of the program’s finances. The report is expected to show a slight improvement in Medicare’s solvency, due largely to the 2% Medicare provider cuts expected under sequestration beginning next year. Three important points to bear in mind:
- Republicans, NOT Democrats, were the ones who insisted on the spending reductions that led to today’s improvement in solvency projections. Many believe the sequester is an imperfect mechanism for achieving spending reductions. That said, if Congress had followed the Obama Administration’s initial guidance and rubber-stamped a $2 trillion-plus increase in the debt ceiling without any spending reductions, today’s report would have shown a worse financial predicament for Medicare. Last year, Secretary Geithner and other Administration officials said it was “critical” and “imperative” that Congress raise the debt limit without being “held hostage” to spending reductions: “Our very strong view is that the debt limit should be passed as a clean, standalone bill.” Yet today, Secretary Geithner and others within the Administration will try to spin how they are FOR today’s slight improvement in Medicare’s financial picture – without pointing out that they were AGAINST passing any spending reductions at all last year. Some may find this flip-flop slightly hypocritical.
- Conversely, in Obamacare Democrats chose to use Medicare savings NOT to reduce the deficit or improve Medicare’s solvency, but instead to create unsustainable new entitlements. Speaker Pelosi said it best last year in an interview when she admitted that Democrats “took a half a trillion dollars out of Medicare in [Obamacare], the health care bill” to pay for more unsustainable new entitlements. Even President Obama, in an interview with Fox News, admitted that “You can’t say that you are saving on Medicare and then spending the money twice.”
- Today’s slight improvement in solvency notwithstanding, Medicare is on an unsustainable path, and needs fundamental reform NOW. Some in the Administration and elsewhere may attempt to use the slight improvement in the program’s finances as an excuse to delay, or even eliminate, additional reforms to the program – which would be a grave mistake for America’s seniors. The Congressional Budget Office’s March 2012 baseline shows Medicare will run budget deficits forever – this even after taking into account the impact of the 2% budget sequester. That is not a record the trustees or Congress should attempt to trumpet – because what business would be proud of a balance sheet that shows cascading losses in perpetuity? While Congress should be working NOW to reform the Medicare program, Senate Democrats are instead reaching the 1,100 day mark on their abdication of leadership, failing to pass a budget and take the tough choices needed to get our fiscal house in order.
We will of course have additional insights and analysis once the report is released later today.