AARP Director of Government Relations David Sloane released the following statement about the 2007 Medicare and Social Security Trustees’ Reports:
“Regularly checking the financial health of critical programs such as Medicare and Social Security is wise. It gives Congress an idea of how much needs to be done to ensure these two programs continue to provide critically needed health and financial security for our nation’s families, particularly older Americans and those with disabilities.”
2007 Annual Trustees Report—Medicare:
“The findings published today that the Medicare Part A Trust Fund will become insolvent in 2019 are of deep concern. Thankfully, Congress has time to act appropriately to ensure the fiscal health of the Trust Fund, but the Trustees’ Report is a warning sign of a far bigger problem.
“Medicare insolvency is a symptom of the disease, which is escalating costs throughout our health care system. While the symptoms must be treated, it is imperative we work to find a cure. Today’s report, along with most other non-partisan indicators, shows that health care costs continue to rise at unsustainable rates. Congress should heed today’s warning in the Trustees’ Report and take action on broad reforms of the nation’s health care system.”
“Today’s Medicare report also includes the second ‘Funding Warning’ in as many years. Triggered by an arbitrary limit on general revenue spending in Medicare, the Fund Warning has little correlation to Medicare’s overall fiscal health.
“As the President now has to propose legislation to address Medicare’s fiscal health it is important to note that simply increasing Medicare Part B premiums will not address rising health care costs. In fact, such a move would be harmful and counterproductive; those enrolled in Medicare Part B have already seen their premiums double since 2000. Positive Medicare changes—such as cutting Medicare Advantage overpayments—would be helpful both as a matter of equity and to ensure the health of the Medicare Trust Funds. But changes in Medicare alone will not solve the health care crisis that lies before the nation.”
2007 Annual Trustees Report—Social Security:
“The Trustees Report is reassuring in that it makes clear that Social Security can pay full benefits for millions of older Americans until at least 2041. But the annual projections are also a stark reminder that it is never too early to begin moving toward a balanced, non-partisan, long-term solution that will ensure solvency for generations to come.
“Debate is needed, but action must follow. The longer that we wait, the bigger the steps that must be taken to ensure solvency in the decades ahead. Action—or inaction—on Social Security has huge consequences for ten of millions of Americans. Most Americans rely on Social Security as their largest source of income in retirement—nearly one third of those receiving Social Security rely on it for nearly all (90 percent or more) of their income.
“The fact is that the decline in our nation’s savings and pension system, particularly the traditional defined benefit system, is likely to add to the importance of Social Security as the principal source of a secure, guaranteed source of income for older Americans in the years ahead.”