Hospitals & Asylums
Review of the 2010
Medicare and Social Security Trustee Reports HA-12-8-10
By Anthony J.
Sanders
The 2010
annual report is the 70th such report for the Social Security Trustees and 45th
for the Medicare Trustees. Although the
reports were due April 1 they were not submitted until August 5, 2010, as
promised when queried in July. The
reason given for the delay of the 2010 Report was to allow incorporation of the
effects of the Patient Protection and Affordable Care Act, as amended by the
Health Care and Education Reconciliation Act of 2010. The Board of Trustees was established under
the Social Security Act to oversee the financial operations of the OASI and DI
Trust Funds. The Board is composed of six members. Four members serve by virtue
of their positions in the Federal Government: the Secretary of the Treasury,
who is the Managing Trustee; the Secretary of Labor; the Secretary of Health
and Human Services; and the Commissioner of Social Security. The other two
positions, which are currently vacant, are for members of the public, appointed
by the President and subject to confirmation by the Senate. The Deputy
Commissioner of the Social Security Administration (SSA) and Administrator of the
Centers for Medicare Medicaid and SCHIP (CMS) are designated Secretary of the
Board. The Social Security Act requires
that the Board, among other duties, report annually to the Congress on the
actuarial (financial) status of the OASI, DI, HI and SMI Trust Funds. The Social Security Trustees are the
Secretary of Treasury Timothy Geithner, Commissioner of Social Security Michael
J. Astrue, Secretary of Labor Hilda S. Solis, Secretary of Health and Human Services Kathleen Sebelius. The Secretaries of the Boards of Trustees are
Jason J. Fichtner, Associate Commissioner, Office of Retirement Policy, SSA and Donald
M. Berwick, M.D., Administrator of
CMS. Stephen C. Goss is the Chief Actuary for the Social Security Trustees and Richard
S. Foster is the Chief Actuary for the Centers for Medicare & Medicaid
Services.
ENROLMENT IN SOCIAL SECURITY AND
MEDICARE
(in thousands)
|
|
OASI |
DI |
OASDI |
SSA Covered Workers |
Workers per SSA Beneficiary |
Medicare |
|
1970 |
22,618 |
2,568 |
25,186 |
92,788 |
3.7 |
20,398 |
|
1980 |
30,384 |
4,734 |
35,118 |
112,623 |
3.2 |
28,433 |
|
1990 |
35,255 |
4,204 |
39,459 |
133,040 |
3.4 |
34,251 |
|
2000 |
38,556 |
6,606 |
45,162 |
154,481 |
3.4 |
39,688 |
|
2005 |
39,961 |
8,172 |
48,133 |
158,511 |
3.3 |
42,606 |
|
2008 |
41,355 |
9,065 |
50,420 |
162,485 |
3.2 |
45,453 |
|
2009 |
42,385 |
9,475 |
51,860 |
156,021 |
3.0 |
46,316 |
|
2010 |
43,527 |
9,967 |
53,494 |
155,170 |
2.9 |
47,351 |
|
2020 |
57,978 |
11,885 |
69,863 |
175,961 |
2.5 |
63,508 |
OASDI Table IV.B2.—Covered Workers and
Beneficiaries, Calendar Years 1945-2085 pg. 53; Medicare Table III.A3.—Medicare Enrollment pg. 50
Social Security and Medicare are
the nation’s largest social insurance programs.
At the end of 2009, the number of social security beneficiaries rose to
53 million people from 51 million the year before: 36 million retired workers
and dependents of retired workers, 6 million survivors of deceased workers, and
10 million disabled workers and dependents of disabled workers. During the
year, an estimated 156 million people had earnings covered by Social Security
and paid payroll taxes, down from 163 million in 2008. 2005-2010 will be the first five year period
since the inception of the program that the number of covered workers has
declined. In 2009, the number of workers
per beneficiary declined to 3.0, and as the result of the retirement of the
Baby Boomer generation, is expected continue to decline even as employment
begins to recover. Total expenditures in
2009 were $686 billion. Total income was $807 billion ($689 billion in tax
revenue and $118 billion in interest earnings), and assets held in special
issue U.S. Treasury securities grew to $2.5 trillion. In 2009 the DI Trust Fund registered a $12
billion deficit for the first time and is not expected to return to solvency;
however the interest earnings from the OASI Trust fund more than offset this
account deficit. Program costs for both
OASI and DI are estimated to exceed tax income in 2010 and 2011 due to the
economic recession. Medicare is the
health insurance program offered to retired and disabled OASDI
beneficiaries. In 2009, 46.3 million
people were covered by Medicare: 38.7 million aged 65 and older, and 7.6
million disabled. 45.9 million people were insured
under Part A, 43 million paid premiums for Part B Supplemental Medical
Insurance and 33 million for Part D drug benefits. About 24 percent, 11 million were enrolled in
Part C private health plans that contract with Medicare to provide Part A and
Part B health services. Total benefits paid in 2009 were $502 billion. Income
was $508 billion, expenditures were $509 billion, and assets held in special
issue U.S. Treasury securities were $381 billion. Deficits in the SMI Trust are offset by the
General Fund and do not incur any liability to the Trust Fund. After many years of concern regarding looming
insolvency the HI Trust Fund registered a $1 billion account in deficit in both
2008 and 2009 that is projected to increase.
|
ESTIMATED OPERATIONS OF TRUST FUNDS |
|||||||||||||
|
|
Income |
Expenditures |
Change
in fund |
||||||||||
|
|
SMI |
|
SMI |
|
|||||||||
|
Year |
OASI |
DI |
HI |
B |
D |
OASI |
DI |
HI |
B |
D |
OASI |
DI |
HI |
|
2007 |
675 |
110 |
219 |
186 |
52 |
496 |
99 |
202 |
180 |
52 |
179 |
11 |
16 |
|
2008 |
695 |
110 |
230 |
198 |
47 |
516 |
109 |
230 |
178 |
47 |
179 |
1 |
-1 |
|
2009 |
698 |
109 |
229 |
206 |
57 |
564 |
122 |
238 |
203 |
57 |
134 |
-12 |
-1 |
|
2010 |
686 |
105 |
218 |
204 |
61 |
586 |
128 |
249 |
220 |
62 |
100 |
-23 |
-32 |
|
2011 |
742 |
113 |
241 |
235 |
71 |
608 |
134 |
259 |
215 |
71 |
134 |
-21 |
-18 |
|
2012 |
790 |
118 |
254 |
264 |
78 |
638 |
141 |
271 |
226 |
78 |
151 |
-23 |
-17 |
|
2013 |
845 |
124 |
277 |
287 |
86 |
680 |
147 |
283 |
242 |
86 |
165 |
-23 |
-6 |
|
2014 |
902 |
131 |
297 |
312 |
93 |
728 |
153 |
296 |
260 |
93 |
174 |
-23 |
1 |
Sources OASDI Table IV.A1.—Operations of the OASI Trust
Fund, Calendar Years 2005-19 pg. 38; Table IV.A2.Operations of the DI Trust
Fund, Calendar Years 2005-19 pg. 41; Medicare Table V.E5.Operations of the HI
Trust Fund during Fiscal Years 1970-2019 pg. 250; Table V.E7. Operations of the
Part B Account in the SMI Trust Fund (Cash Basis) during Fiscal Years 1970-2019
pg. 253; Table V.E8. Operations of the Part D Account in the SMI Trust Fund
(Cash Basis) during Fiscal Years 2004-2019 pg. 254
In last year’s report, the recession
was projected to reach a bottom in the first half of 2009 and to return to
full-employment levels in 2015. For this
year’s report, we now know that the recession actually did reach bottom in the
second quarter of 2009, but with higher unemployment and lower wages and OASDI
taxable earnings than were projected last year. Furthermore, the recovery to a
stable full-employment path for the economy is now projected to be completed in
2018 rather than 2015. Annual cost is
projected to be less than tax income in 2012 through 2014, and then to exceed
tax income beginning in 2015.
Expenditures in excess of income is projected
to result in the exhaustion of the DI Trust Fund by the end of 2018. Higher disability incidence rates and lower
termination rates are assumed, reflecting the deeper recession and slower
recovery than was assumed in last year’s report. The number of disabled-worker
beneficiaries is now projected to be about 100,000 higher at the end of 2010
and about 300,000 higher at the end of 2015 than in last year’s report. Over the last 20 years, the rates of benefit
termination due to death and the proportion converting to retirement benefits
(at attainment of NRA) have declined very gradually. Currently, the proportion
of disabled beneficiaries whose benefits cease because of their recovery from
disability is very low in comparison to levels experienced throughout the 1970s
and early 1980s. Historically the number
of disability beneficiaries per 1,000 insured rose from 20 per 1,000 in 1970 to
around 50 per 1,000 in 2010. The
disability termination rate hit a high of 120 per 1,000 in the early 1980s,
rising from 90 per 1,000 in 1970, dropping to 60 per 1,000 in 1990 and dropping
further to 40 per 1,000 in 2000 to its current rate of about 30 per 1,000 in
2010. In the short-range period (through
2019), the age-sex-adjusted death rate is projected to gradually decline from
27.2 deaths per 1,000 beneficiaries in 2009 to about 22.6 per 1,000 by 2019.
The age-sex adjusted recovery rate is assumed to rise from a relatively low
level of 9.1 per thousand beneficiaries in 2009 to 11.6 per thousand
beneficiaries by 2019. Under low-cost and high-cost assumptions, total
age-sex-adjusted termination rates due to death and recovery are assumed to
increase or decrease, respectively, roughly 10-14 percent relative to the
intermediate assumptions.
TAX RATES 2010
|
|
OASI |
DI |
OASDI |
HI |
Total |
|
Employees |
5.30 |
0.90 |
6.20 |
1.45 |
7.65 |
|
Employers |
5.30 |
0.90 |
6.20 |
1.45 |
7.65 |
|
Combined total |
10.60 |
1.80 |
12.40 |
2.90 |
15.30 |
Source:
A Summary of the Annual Trustee Reports. August 5, 2010
Social Security’s cost as a percentage
of GDP is projected to grow from 4.8 percent in 2010 to about 6.1 percent in
2035, then to decline to 5.9 percent by 2050, and to remain between 5.9 and 6.0
percent through 2084. The assets of the
OASI Trust Fund and of the combined OASI and DI Trust Funds are projected to be
adequate over the next 10 years under the intermediate assumptions. However,
the assets of the DI Trust Fund are projected to steadily decline over the next
10 years under the intermediate assumptions, falling below 100 percent of
annual cost by the beginning of 2013 and continuing to decline until the trust
fund is exhausted in 2018. Under current
law, the cost of Social Security will generally increase faster than the
program’s income because of the aging of the baby-boom generation, continuing
low fertility (compared to the baby-boom period), and increasing life
expectancy. During periods when trust fund disbursements exceed income, as
might happen during an economic recession, trust fund assets are used to meet
the shortfall. In the event of recurring shortfalls for an extended period, the
trust funds can allow time for the development, enactment, and implementation
of legislation to restore financial stability to the program, namely increase
the rate of taxation. Assets currently
held by the OASI Trust Fund are special issues (i.e., securities sold only to
the trust funds). These are of two types: short-term certificates of
indebtedness and long-term bonds sold exclusively to the federal government.
The certificates of indebtedness are issued on a daily basis for the investment
of receipts not required to meet current expenditures, and they mature on the
next June 30 following the date of issue. Special-issue bonds, on the other
hand, are normally acquired only when special issues of either type mature on
June 30. The amount of bonds acquired on June 30 is equal to the amount of
special issues maturing, less amounts required to meet expenditures on that
day. Social Security Assets have grown
to $2.5 trillion and the cost of servicing this debt cost the General Fund $118
billion in 2009. Social security is
efficient. Net administrative expenses
charged to the OASI and DI Trust Funds in calendar year 2009 totaled $6.2
billion. This amount represented 0.9 percent of contribution income and 0.9
percent of expenditures. DI is
considerably more labor intensive to administrate and costs were 2.8 percent of
contributions compared to 0.6 percent for OASI.
TRUST FUND
GROWTH 1940-2010
[in billions]
|
Year |
OASI Fund |
DI Fund |
HI Fund |
SMI Fund |
Total Fund |
|
1940 |
1.8 |
|
|
|
1.8 |
|
1950 |
12.9 |
|
|
|
12.9 |
|
1960 |
20.8 |
2.2 |
|
|
23 |
|
1970 |
32.7 |
5.1 |
2.7 |
0.06 |
40.5 |
|
1980 |
24.6 |
7.7 |
14.5 |
4.5 |
51.3 |
|
1990 |
203 |
11.7 |
95.6 |
14.3 |
324.8 |
|
2000 |
893 |
114 |
168 |
45.9 |
1,221 |
|
2005 |
1,603 |
193 |
274 |
18.6 |
2,089 |
|
2008 |
2,203 |
216 |
321 |
60.3 |
2800 |
|
2009 |
2,337 |
204 |
304 |
76.6 |
2,922 |
Source: Section 13 SSA and Medicare of the OMB Historical Tables 2006: 1937-2010; A Summary of the
Annual Trustee Reports. August 5, 2010
The 111th Congress has
enacted a number of bills affecting Social security. The particulars of Martinez et al v. Astrue
No. Cal. No
08-CV-48735-CW led to the passage
of No Social Security Benefits for Prisoners Act of 2009, Public
Law 111-115 (humorously mis-referenced in the
Report to the Consolidated Appropriations Act, 2010 Public Law
111-117), that was enacted on December 16, 2009 to amend the Social
Security Act to prohibit retroactive payments to individuals during periods for
which such individuals are prisoners, probation or parole violators, or
fugitive felons. The Social Security
Disability Applicants’ Access to Professional Representation Act of 2010, Public
Law 111-142, was enacted on February 27, 2010, to permanently extend
attorney fee withholding procedures elaborated upon in Astrue v. Ratliff No.
08-1322 (2010) to certain qualified non-attorney
representatives. The Hiring Incentives
to Restore Employment (HIRE) Act, Public
Law 111-147, was enacted on March 18, 2010, Title I exempts most employers
from paying the employer share of OASDI tax on wages paid after the date of
enactment and before January 1, 2011 to certain qualified individuals hired and
employed after February 3, 2010. This law has no direct financial effect on the
OASDI program because the tax amounts not paid by employers will instead be
transferred from the General Fund of the Treasury to the OASDI Trust Funds. A
small increase in total employment is expected to result for 2010 due to this
tax incentive that is misconceived to not hold the grossly surplus OASDI Trust
responsible and pay from the grossly deficient General Fund, that is also too
corrupt to pay for, but it would not be unreasonable for OASDI to
experimentally try to stimulate the economy with their own tax credit. The Patient Protection and Affordable Care
Act, Public
Law 111-148, was enacted on March 23, 2010 as amended by the Health Care
and Education Reconciliation Act of 2010, Public Law
111-152, that was enacted on March 30, 2010 collectively referred to as the
“Affordable Care Act” or ACA, contains roughly 165 provisions affecting the
Medicare program. ACA is estimated to
postpone the exhaustion of HI trust fund assets from 2017 under the prior law
to 2029 under current law. Premiums paid
by employees and employers for employer sponsored group health insurance are
excluded from OASDI coverage and thus are not subject to the payroll tax.
|
SOCIAL SECURITY AND MEDICARE COST AS % OF GDP |
|
|
Source:
A Summary of the Annual Trustee Reports. August 5, 2010
Medicare expenditures represented
0.7 percent of GDP in 1970 and grew to 2.7 percent of GDP by 2005. HI and SMI are financed in very different
ways. Within SMI, Part B and Part D premiums and general revenue financing are
reestablished annually to match expected costs for the following year. In
contrast, HI is subject to substantially greater variation in asset growth,
since financing is established through statutory tax rates that cannot be
adjusted to match expenditures except by enactment of new legislation. Starting in 2006, Medicare provided
subsidized access to prescription drug coverage through Part D, increasing
Medicare expenditures to 3.1 percent of GDP in the first year. Medicare expenditures are projected to reach
about 6.4 percent of GDP by 2080.
Medicare expenditures represented 3.5 percent of GDP in 2009. Under
current law, costs would increase to about 5.5 percent of GDP by 2035 under the
intermediate assumptions and to 6.4 percent of GDP by the end of the 75-year
period. Annual SMI expenditures grew from about 1.2 percent of GDP in 2005 to
1.6 percent of GDP in 2006 with the commencement of prescription drug coverage.
Under the current-law assumptions, SMI expenditures would grow to almost 3.5
percent of GDP within 25 years and to more than 4 percent by the end of the projection
period. Compared to the projections in
last year’s annual report, projected Medicare costs as a percentage of GDP are
12 percent lower in 2019, 20 percent lower in 2030, and 43 percent lower in
2080 primarily as the result of additional 0.9 percent of earnings high income
workers will be required to pay into the HI trust fund under the ACA. The legislation postpones the estimated date
of exhaustion for the HI trust fund from 2017 in last year’s report to 2029. Projected long-range expenditures for SMI
Part B are also substantially lower than before, while Part D expenditures are
slightly lower. In 2010, due to the
economic recession, HI expenditures are expected to grow faster than income and
is estimated to fall short by more than $30 billion
due to depressed levels of economic activity and an expected $8 billion
downward adjustment in income that corrects for excess payroll tax revenue
credited to the trust fund. Beginning in 2011, income will grow faster than
expenditures due to the provisions of the ACA and the assumed economic
recovery. Over the next 10 years, HI expenditure growth is estimated to average
between 4.6 and 5.8 percent per year, while HI income growth is estimated to
average between 5.8 and 7.3 percent per year.
Trust fund deficits are projected to continue for the next 4 years in
the absence of further corrective legislation, although at substantially
reduced levels compared to the deficits projected prior to the ACA.
BENIFICIARY COST OF LIVING ADJUSTMENT
COMPARED TO MEDICARE PREMIUM
|
|
Beneficiary COLA |
Part
B Premium |
Increase
from Previous Year |
Annual
Deductible |
Part
D Premium |
Increase
from Previous Year |
|
1970 |
|
$4.00 |
0% |
$50 |
|
|
|
1980 |
14.3% |
8.70 |
6% |
60 |
|
|
|
1990 |
4.7% |
28.60 |
-10% |
75 |
|
|
|
2000 |
2.5% |
45.50 |
0% |
100 |
|
|
|
2005 |
2.7% |
78.20 |
17.4% |
110 |
|
|
|
2008 |
2.3% |
96.40 |
5.6% |
135 |
27.93 |
2.1% |
|
2009 |
5.8% |
96.40 |
0% |
135 |
30.36 |
8.7% |
|
2010 |
0% |
110.50 |
14.6% |
155 |
31.94 |
5.2% |
Sources: Social Security Fact Sheet. History of Automatic Cost-Of-Living Adjustments 1975-2010; Medicare Table V.C2.—SMI Cost-Sharing and Premium Amounts pg. 234
The monthly
premium for 2010 is $110.50 and was set at a significantly higher level than
would have been required normally as a result of this financing problem. Under
the intermediate economic assumptions, monthly premiums of $120.10 and $113.80
are estimated for 2011 and 2012, respectively, compared to $96.40 in 2009, an
18 percent increase in 2010 and 5.5 percent in 2011. The variation in premium amounts for
different categories of Part B enrollees would be particularly large in 2011 if
another zero COLA occurs for December 2010 (as is currently expected). About 75
percent of enrollees would continue to pay $96.40 per month, as they have since
2009. Newly eligible enrollees with incomes between roughly $15,000 and $85,000
per year would pay a monthly premium of $120.10 under the intermediate
assumptions, or 25 percent more than otherwise-similar individuals who became
eligible in 2009 or earlier. State
Medicaid programs would also pay $120.10 on behalf of low-income enrollees who
qualify for Medicaid assistance. Finally, single enrollees with incomes above
$85,000 (or married enrollees filing jointly with incomes above $170,000) would
pay premiums ranging from $168.10 to $384.20 per month. A great deal of the CMS corruption dates to
the $66.60 premium of 2004. It was
estimated that in 2010 there would be 8.80 million inpatient deductibles paid
at $1,100 each, 2.30 million inpatient days subject to coinsurance at $275 per
day (for hospital days 61 through 90), 1.13 million lifetime reserve days
subject to coinsurance at $550 per day, and 41.74 million extended care days
subject to coinsurance at $137.50 per day. Similarly, it was estimated that in
2009 there would be 8.70 million deductibles paid at $1,068 each, 2.27 million
days subject to coinsurance at $267 per day (for hospital days 61 through 90),
1.12 million lifetime reserve days subject to coinsurance at $534 per day, and
40.79 million extended care days subject to coinsurance at $133.50 per day. The
total increase in cost to beneficiaries was estimated to be $730 million due to
(i) the increase in the inpatient deductible and coinsurance amounts; and (ii)
the change in the number of deductibles and daily coinsurance amounts
paid. Taking into consideration the way
medical insurance premiums increase much faster than beneficiary income
premiums need to be reduced or waived entirely for low income beneficiaries to
always hold the medical insurance program harmless.
NATIONAL HEALTH
EXPENITURES and GROWTH BY SOURCE OF FUNDS 1970-2005
Sources: Fig. 3-2 Compromise to
Immediately Achieve Single Payer Universal Coverage and Progressively Realize
National Health Insurance that is Free for All. Hospitals & Asylums HA-28-4-08
pg. 32;
Catlin, Aaron; Cowan,
Cathy; Heffler, Stephen; Washington, Benjamin. National Health Spending in 2005. Health Affairs 26:1 (2007)
Reimbursement amounts for
physician services, durable medical equipment (DME), laboratory tests performed
in physician offices and independent laboratories, and other services (such as
physician-administered drugs, free-standing ambulatory surgical center facility
services, ambulance, and supplies) are paid through organizations acting for
the Centers for Medicare & Medicaid Services (CMS). The Tax Equity and
Fiscal Responsibility Act (TEFRA) of 1982 mandated that CMS negotiate with private
health maintenance organizations (HMOs) to offer Medicare A/B coverage on a
risk basis at 95 percent of estimated cost county-level fee for service cost
estimates. The Balanced Budget Act (BBA)
of 1997 expanded the coverage options and payment rules of the Medicare risk
system and named the program Medicare+Choice,
permitting CMS to enter into risk contracts with preferred provider
organizations (PPOs), provider-sponsored organizations (PSOs), and private
fee-for-service (PFFS) plans, and eliminating the direct link between Medicare
plan payments and county-level fee-for-service costs. Beginning in 1998, annual
payment rates were based on the largest of three amounts: a minimum payment
amount, or “floor”; a blended national and local rate; or a 2-percent minimum
increase over the prior year’s rate.
Prior to 2006, payments to private health plans were directly based on a
published capitation ratebook. Beginning in 2006,
payments are based on competitive bids and their relationship to corresponding
benchmarks, which are based on the ratebook. To account for the distinct benefit,
enrollment, and payment characteristics of private health plans, enrollment and
spending trends for such plans are analyzed at the product level: (1) Local
coordinated care plans (LCCPs), which include HMOs, HMOs with a
point-of-service option, local PPOs, PSOs, and Medical Savings Accounts; (2)
Private Fee-for-Service (PFFS) plans; (3) Regional PPO (RPPO) plans; (4)
Special needs plans (SNPs); (5) Other products, which include cost plans and
Program of All-Inclusive Care for the Elderly (PACE) plans. The share of Medicare enrollees in private
health plans is projected to decrease from the 2010 level of 24.7 percent to
13.0 percent in 2020. The share will decrease further to 12.8 percent by 2024
and will remain at that level through 2030. Overall, total health plan
membership is expected to increase by 27 percent between 2019 and 2030 due to
the large expected increase in total Medicare beneficiaries during those years.
(The total Medicare population is expected to increase by 30 percent between
2019 and 2030.)
HEALTH EXPENDITURE PER CAPITA 1970, 1980, 1990,
2003 (% GDP and Life Expectancy 2006), 18 Countries
|
|
1970 |
1980 |
1990 |
2003 |
% GDP |
Life Expectancy 2006 |
|
Australia |
$252 |
$691 |
$1,306 |
$2,886 |
9.2% |
80.5 |
|
Austria |
193 |
770 |
1,328 |
2,958 |
9.6 |
79.07 |
|
Belgium |
148 |
636 |
1,341 |
3,044 |
10.1 |
78.77 |
|
Canada |
299 |
783 |
1,737 |
2,998 |
9.9 |
80.22 |
|
Denmark |
384 |
927 |
1,522 |
2,743 |
8.9 |
77.79 |
|
Finland |
191 |
590 |
1,419 |
2,104 |
7.4 |
78.5 |
|
France |
205 |
697 |
1,532 |
3,048 |
10.4 |
79.73 |
|
Iceland |
163 |
703 |
1,593 |
3,159 |
10.5 |
80.31 |
|
Ireland |
117 |
519 |
794 |
2,455 |
7.2 |
77.73 |
|
Italy |
NA |
NA |
1,387 |
2,314 |
8.4 |
79.81 |
|
Japan |
149 |
580 |
1,116 |
2,249 |
8.0 |
81.25 |
|
Luxembourg |
163 |
640 |
1,533 |
4,611 |
7.7 |
78.89 |
|
Netherlands |
NA |
755 |
1,435 |
2,909 |
9.1 |
78.96 |
|
Norway |
141 |
665 |
1,393 |
3,769 |
10.1 |
79.54 |
|
Sweden |
312 |
944 |
1,589 |
2,745 |
9.3 |
80.51 |
|
Switzerland |
351 |
1,031 |
2,029 |
3,847 |
11.5 |
80.51 |
|
United
Kingdom |
163 |
480 |
987 |
2,317 |
7.8 |
78.54 |
|
United
States |
352 |
1,072 |
2,752 |
5,711 |
15.2 |
77.85 |
Source: Fig. 1-4 Compromise to Immediately Achieve Single Payer Universal
Coverage and Progressively Realize National Health Insurance that is Free for
All. Hospitals & Asylums HA-28-4-08
pg. 11; Exhibits 2 & 4. Kaiser Family Foundation Health Care Spending in the
United States and OECD Countries. January 2007
Every
effort must be made not only to bring Medicare costs—and health care costs in
the U.S. generally—more in line with society’s ability to afford them but also
to improve the quality of health care outcomes. The Affordable Care Act limits
the annual increase in Medicare prices for most health services by about 1.1 percentage
points (the estimated growth in economy-wide multifactor productivity) below
the increase in prices that providers must pay to purchase the goods and
services they need to provide health care services. This is however
insufficient. The
U.S. is the only industrialized nation that does not have a universal health
insurance system. Health
spending per capita in the US private health insurance system, at $5,777, is
the highest in developed countries -- 24% higher than in the next highest
spending countries, and over 90% higher than in many other countries that would
be considered global economic competitors.
The share of GDP devoted to health
grew from 8.8% of GDP in 1980 to 15.2% of GDP in 2003. Despite
the high cost, the U.S. tends to lag behind its peers in many vital
statistics. An estimated 47 million
people, 15% of the population, are uninsured.
The inflation in medical costs,
including premiums, and especially easily controlled government health
expenditures must be limited to no more than 3% per year. For
the 2001-2005 Trustees Reports, the increase in average expenditures per
beneficiary for the 25th through 75th years of the projection was assumed to
equal the growth in per capita GDP plus 1 percentage point. Four years ago the Board of Trustees adopted
a slight refinement of the long-range growth assumption that provided a more
gradual transition from current health cost growth rates, which have been
roughly 2 to 3 percentage points above the level of GDP growth, to the ultimate
assumed level of GDP plus zero percent just after the 75th year and for the
indefinite future. A 15-member
Independent Payment Advisory Board is established to under the ACA to
re-enforce the Gross Domestic Product (GDP) plus one percent formula. ACA
and Medicare Trustee cost control measures have been tepid if not outright
corrupt; Medicare and the health sector in general need to rally around the
objective of limiting the increase in medical costs to a 3 percent
ceiling.
US
POPULATION GROWTH 1790-2000
|
|
1790 |
1800 |
1810 |
1820 |
1830 |
1840 |
1850 |
1860 |
1870 |
1880 |
1890 |
|
Population |
3,929,214 |
5,236,631 |
7,239,881 |
9.638,453 |
12,866,020 |
17,069,453 |
23,191,876 |
31,443,321 |
38,558,371 |
49,371,340 |
62,979,766 |
|
Decade
Growth |
|
33.3% |
38.8% |
33.1% |
33.5% |
32.7% |
35.9% |
35.6% |
22.6% |
28.0% |
27.6% |
|
|
1900 |
1910 |
1920 |
1930 |
1940 |
1950 |
1960 |
1970 |
1980 |
1990 |
2000 |
|
Population |
76,212,168 |
92,228,496 |
106,021,537 |
123,202,624 |
132,164,569 |
151,325,798 |
179,323,175 |
203,211,926 |
226,545,805 |
248,421,906 |
281,421,906 |
|
Decade
Growth |
21.0% |
21.0% |
15.0% |
16.2% |
7.3% |
14.5% |
18.5% |
13.3% |
11.5% |
13.2% |
13.2% |
Sources: Fig. 10-1 American Political Economy HA-20-3-10;
Decennial Census,
Actuarial estimates are based
primarily upon population growth rates, comprised of fertility, mortality and
migration statistics. The total
fertility rate decreased from 3.31 children per woman at the end of World War I
(1918) to 2.15 during the Great Depression (1936). After 1936, the total
fertility rate rose to 3.68 in 1957 and then fell to 1.74 by 1976. After 1976,
the total fertility rate began to rise again, reaching a level of 2.07 for
1990. In the 1990s, the total fertility rate was fairly stable, around 2.00
children per woman. Since 2000, the total fertility rate has been consistently
above 2.00, and was 2.12 in 2006. The
total age-sex-adjusted death rate declined at an average rate of 1.09 percent
per year between 1900 and 2006. The
age-sex-adjusted death rate for ages 65 and over declined at an average rate of
0.78 percent per year between 1900 and 2006. Between 1982 and 2006, the age-sex
adjusted death rate for these ages declined at an average annual rate of 0.69
percent. Legal immigration increased after World War II to around 300,000
persons per year and remained around that level until shortly after 1960. With
the Immigration Act of 1965 annual legal immigration increased to about 400,000
and remained fairly stable until 1977.
Between 1977 and 1990, legal immigration once again increased, averaging
about 580,000 per year. The Immigration Act of 1990, which took effect in
fiscal year 1992, increased significantly the number of immigrants legally
entering the United States. Legal
immigration averaged about 780,000 persons per year during the period 1992
through 1999, increasing to about 900,000 in 2000 reaching 1,000,000 in 2001
before declining to less than 800,000 by 2003 and increasing again, reaching a
high of about 1,200,000 for 2005 and 2006 and then decreasing from 2007 to
2008, to about 1,100,000. The number of other immigrants residing in the Social
Security area population is estimated to have been about 9.7 million persons as
of January 1, 2000, increasing to about 12.8 million persons as of January 1,
2006. The average number of persons entering the other-immigrant population in
the period 2000 through 2006 is estimated to have been about 1.5 million per
year. During the same period, the number of other immigrants who left the
Social Security area or adjusted status to become LPRs is estimated to have
averaged about 960,000 per year. Thus, annual net other immigration during this
time period is estimated to have averaged approximately 540,000 persons. Annual other immigration is assumed to
continue at the level of 1.2-1.8 million persons.
CONSUMER PRICE INDEX INFLATION 1920-2010
|
1920 |
1930 |
1940 |
1950 |
1960 |
1970 |
1980 |
|
15.6% |
-2.3% |
0.7% |
1.3% |
1.7% |
5.7% |
13.5% |
|
1990 |
2000 |
2005 |
2006 |
2007 |
2008 |
2009 |
|
5.4% |
3.4% |
3.4% |
3.2% |
2.8% |
3.8% |
-0.4% |
Source:
Department of Labor. Consumer Price Index (CPI) All Urban Consumers July 13, 2010
Actuarial
economic estimates for the Social security and Medicare programs are based
primarily in the Consumer Price Index (CPI) as reflected in the Consumer Price
Index for All Urban Consumers (CPI-U), Consumer Price Index for Urban Wage
Earners and Clerical Workers (CPI-W) and Consumer Price Index for Medical Care
(CPI-M). Total U.S. economy productivity
is defined as the ratio of real GDP to hours worked by all workers. The rate of
change in total- economy productivity is a major determinant in the growth of
average earnings. For the 40 years from 1968 to 2008, annual increases in total
productivity averaged 1.7 percent, the result of average annual increases of
1.7, 1.3, 1.5, and 2.2 percent for the 10- year periods 1968-78, 1978-88,
1988-98, and 1998-2008, respectively. For 2009, the estimated annual change in
productivity is 2.5 percent. Historically, the CPI increased at an average
annual rate of 4.6 percent for the 40 years from 1968 to 2008, the result of
average annual increases of 6.5, 6.0, 3.2, and 2.8 percent for the 10-year
periods 1968-78, 1978-88, 1988-98, and 1998-2008, respectively. The GDP
deflator increased at an average annual rate of 4.1 percent from 1968 to 2008,
the result of average annual increases of 6.3, 5.2, 2.5, and 2.4 percent for
the same respective 10-year periods. For 2009, the annual change was -0.7
percent for the CPI and is estimated to be 1.2 percent for the GDP deflator. The ultimate annual increases in the CPI are
assumed to be 1.8, 2.8, and 3.8 percent for the low-cost, intermediate, and
high-cost assumptions, respectively. For the intermediate assumptions, the
annual change in the CPI is assumed to be 2.0 percent for 2010. As the economy
moves on a path toward full employment, the annual change is assumed to
increase gradually from 1.7 percent in 2011 to the ultimate growth rate of 2.8
percent in 2014 and later. Because the
actual level of the CPI in the third quarter of 2009 was below the level of the
CPI in the third quarter of 2008, there was no automatic cost-of living benefit
increase for December 2009. Because the assumed level of the CPI in the third
quarter of 2010 is still below the level of the CPI in the third quarter of 2008,
no automatic cost-of-living benefit increase is projected for December 2010. As
the result of hold-harmless provisions beneficiaries with annual incomes less
than $15,000 shall pay 2009 premiums until cost-of living increases are
resumed. Automatic cost-of-living benefit increases are projected to resume in
December 2011 and occur in each subsequent year.
2010
Annual Reports
Summary of the
2010 Annual Reports. Social Security and Medicare
Boards of Trustees. August 5, 2010
The 2010 Annual
Report of the Board of Trustees of the Federal Old-Age and Survivors Insurance
and Federal Disability Insurance Trust Funds. The Board of Trustees, Federal Old-Age and Survivors Insurance and
Federal Disability Insurance Trust Funds. Washington D.C. August 5, 2010
The 2010 Annual
Report of the Board of Trustees of the Boards of Trustees of the Federal
Hospitals Insurance and Federal Supplemental Medical Insurance Trust Fund. The Board of Trustees, Federal Hospital Insurance and Federal
Supplemental Medical Insurance Trust Funds. Washington D.C. August 5, 2010
Work
Cited
American Political Economy. Hospitals & Asylums HA-20-3-10
Catlin, Aaron; Cowan,
Cathy; Heffler, Stephen; Washington, Benjamin. National Health Spending in 2005. Health Affairs 26:1 (2007)
Compromise to
Immediately Achieve Single Payer Universal Coverage and Progressively Realize
National Health Insurance that is Free for All. Hospitals &
Asylums HA-28-4-08
Department of
Labor.
Consumer Price Index (CPI) All Urban Consumer July 13, 2010
Federal Budget in Balance FY
2011: Comparison of Bush and Obama HA-28-2-10
Health and Welfare. Book 3. 6th Ed. Summary.
Hospitals & Asylums. July 31, 2010
Kaiser Family Foundation Health Care Spending in the United States and
OECD Countries. January 2007
Social Security Fact Sheet. History of Automatic Cost-Of-Living
Adjustments 1975-2010
Cases
Astrue,
Commissioner of Social Security v. Ratliff. U.S. Supreme Court No.
08-1322, June 14, 2010
Martinez
et al v. Astrue, Commissioner of Social Security No. Cal. No
08-CV-48735-CW ,
August 11, 2009
Statute
Consolidated Appropriations Act,
2010 Public
Law 111-117, December 16, 2009
Health Care and Education
Reconciliation Act of 2010, Public Law
111-152, March 30, 2010
Hiring Incentives to Restore
Employment (HIRE) Act, Public
Law 111-147, March 18, 2010
No Social Security Benefits for
Prisoners Act of 2009, Public
Law 111-115, December 16, 2009
Patient Protection and Affordable
Care Act, Public
Law 111-148, was enacted on March 23, 2010
Social Security Disability
Applicants’ Access to Professional Representation Act of 2010, Public
Law 111-142, February 27, 2010