NCPA Social Security Trustees Briefing 2010

8/8/2019 NCPA Social Security Trustees Briefing 2010

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2009 and 2010 Trustees Reports Estimates of

Medicares Infinite Horizon UnfundedObli ations

2009Trustees Re ort

2010Trustees Re ort Percent

Trillions

Trillions Change

Part A $36.72$0.30

101%Part B 37.00 21.10 43%

Part D 15.50 15.80 2%

Total $89.22 $36.60 59%

Sources: Tables III.B10, III.C15 and III.C23, 2009 and 2010 Medicare Trustees Reports.

National Center forPolicy Analysis

Private Enterprise Research CenterTexas A&M University


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Medicare Spending from the 2010 Trustees

Trustees Report94% 95%

97%

80

90 80%

67%

50

60

70 59%

43%

56%Part A

Part B

20

30

40 Part D

0

10

2020 2050 2080Sources: Ta e III.A2. 2009 an 2010 Me icare Trustees Reports. Percents re ect t e 2010 Report s s ares o GDP aspercents of the 2009 estimates.




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Does the Patient Protection andAffordable Care Act Bend the




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National Health Expenditures (NHE) as a Percent

22

Part D

oNHE % of GDP

21

D P

Part B NHE % of GDPPrior Law

(New Law PPACA)

19

20

r c e n t o

f G

18

P

17

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

,

Affordable Care Act, as Amended, Richard S. Foster, Chief Actuary, April 22, 2010, Table 5.




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National Health Ex enditures NHE er ca ita

11000

11500 NHE per capita(New Law PPACA)

10000

10500

g 2 0 1 0 $ NHE per capita

(Prior Law)

9000

9500

i t a s p e n d i

8000

8500

P e r c a p

7000

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019Sources: Office of the Actuary memorandum, Estimated Financial Effects of the Patient Protection andAffordable Care Act, as Amended, Richard S. Foster, Chief Actuary, April 22, 2010, Table 5. Population fromNHE Projections 2009 1019.




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Bending the Medicare Curve




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Medicare er Beneficiar14000

Medicare perbeneficiary

12000 g 2 0 1 0 $

Medicare perbeneficiary

(Prior Law)

10000

11000

i t a s p e n d i

8000

9000

P e r c a p

7000

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

, ,

as Amended, Richard S. Foster, Chief Actuary, April 22, 2010, Table 5 and 2009 Medicare and Social Security Trustees Reports.




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Reduction in Medicare Benefits

Per Beneficiary0

2020 205020402030

2000

1000

$2,300 f i t s N e t o

f

5000

4000 $3,844

e d i c a r e B e n

i u m

s 2 0 1 0

$

8000

7000

$6,396

e d u c t i o n i n P

r e

10000

9000

$9,413

R

Sources: Medicare benefits are net of premiums and premiums of 25 percent of Part B and D spending are assumed. 2009, ,

Medicare Trustees Report.




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Percent of Social Security Income Required to

70.0Cover the Reduction in Medicare Benefits

50.0

60.0

S o c i a l S e c u r i t y

30.0

40.0

e B e n e f i t s % o

B e n e

f i t s

10.0

20.0

i n N e t M e d i c a

0.0

2010 2015 2020 2025 2030 2035 2040 2045 2050 2055 2060 2065 2070 2075 2080

C h a n g

. . . , .

Reports, and May 12, 2009, Office of the Actuary memorandum. Social Security income is the income for average new retirees in each year.




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Payers

118%

100 100% 91%

80%

60

8074%

68%62%

50%Medicare's prices as a % of Medicaid

40

Medicare's Prices as a % of Private Health Insurance

0

2010 2019 2030 2050

Source: Derived from Office of the Actuary Memorandum, August 5, 2010, Figure 1.




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Percent of Facilities with Negative Total

arg ns ter t e assage o t eAffordable Care Act 40%

3540

25

30

15%

25%

10

15

20

0

5

Source: Office of the Actuary Memorandum, August 5, 2010.




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I encourage readers to review the that are based on more sustainableassumptions for physician and other

Richard S. Foster

,Services, 2010 Medicare Trustees Report




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Comparing Medicares Total General Revenue Funding

equ remen s as ercen s o e era ncome axes90 2009 Alternative2009 Trustees Report

60

70

c o m e T a x e s

2010 Alternative

2010 Trustees Report

40

50

f F e d e r a l I n

10

20 P e r c e n t

0

2010 2020 2040 2060 2080Sources: Table III.A2. 2009 and 2010 Medicare Trustees Reports. Table VI.F4. 2009 and 2010 Social Security Trustees Reports. 2009 Alternativefrom May 12, 2009 Office of the Actuary Memorandum, Table 4. 2010 Alternative from August 5, 2010 Office of the Actuary Memorandum, Tables4 & 5. Part B and D Premiums assumed to be 25 percent of spending. Federal individual and corporate income taxes assumed to be 10.6% of GDP,the 50 year average for 1960 to 2009.




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On the One Hand . . . T e A or a e Care Act re uces Me icare s

75 year unfunded obligations by over 40

Reports.

benefits per capita are lower in the 2010Report than in last years report. In ten years they are 15 percent lower. In twenty years they are 21 percent lower.




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On the Other Hand . . . Medicares Trustees and the Chief Actuary

caution that the estimates in the 2010Trustees Report are too optimistic and

Medicares costs will be higher thanreported.

Consequently, the current Federal Budgetestimates of deficits, the debt, and annualinterest payments are too optimistic.



NCPA Social Security Trustees Briefing 2010

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