{"id":1510151,"date":"2022-06-10T08:05:16","date_gmt":"2022-06-10T12:05:16","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1510151"},"modified":"2022-06-10T08:05:45","modified_gmt":"2022-06-10T12:05:45","slug":"fact-check-medicare-is-already-functionally-insolvent","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/fact-check-medicare-is-already-functionally-insolvent\/","title":{"rendered":"Fact Check: Medicare Is Already Functionally Insolvent"},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"float:left\"><div class=\"counts mashsbcount\">14<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Ffact-check-medicare-is-already-functionally-insolvent%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1510151&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><div><img decoding=\"async\" src=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-content\/uploads\/2022\/06\/48842498433_1fd02cc6e1_o.jpg\" class=\"ff-og-image-inserted\" alt=\"image\" \/><\/div>\n<p>The recently released <a href=\"https:\/\/www.cms.gov\/files\/document\/2022-medicare-trustees-report.pdf\">Medicare trustees report<\/a> estimates the program\u2019s Part A trust fund faces insolvency in 2028, two years later than last year\u2019s estimate. Some might think that represents a major improvement in the program\u2019s fiscal position. But a fact-checker\u2014at least a politically honest one\u2014might say the 2028 projection lacks important context.<\/p>\n<p>In reality, Medicare faces a series of financial challenges, many of them created by fiscal gimmicks, that make the program\u2019s shortfalls much greater than the \u201cofficial\u201d estimates suggest. Politicians have been hiding the hard facts about Medicare for decades, and when they finally have to face the fiscal music\u2014which will happen sooner rather than later\u2014the American people will not like what they hear.<\/p>\n<h2><strong>Obamacare Double-Counting<\/strong><\/h2>\n<p>In truth, Medicare\u2019s trust fund is already insolvent, and has been for several years. In 2009, the last year before Obamacare\u2019s passage, the program\u2019s actuaries <a href=\"https:\/\/www.cms.gov\/Research-Statistics-Data-and-Systems\/Statistics-Trends-and-Reports\/ReportsTrustFunds\/Downloads\/TR2009.pdf\">estimated<\/a> trust fund insolvency in 2017\u2014five years ago. But suddenly, the year that Obamacare passed, the insolvency date <a href=\"https:\/\/www.cms.gov\/Research-Statistics-Data-and-Systems\/Statistics-Trends-and-Reports\/ReportsTrustFunds\/Downloads\/TR2010.pdf\">got extended<\/a> until 2029. What happened?<\/p>\n<p>As some might recall, Obamacare <a href=\"https:\/\/www.washingtonpost.com\/news\/wonk\/wp\/2012\/08\/14\/romneys-right-obamacare-cuts-medicare-by-716-billion-heres-how\/\">lowered Medicare spending by $718 billion<\/a> and raised several Medicare-related taxes. What happened with that money is such a Washington politician\u2019s gimmick that the politicians deserve to explain it themselves:<\/p>\n<figure class=\"wp-block-embed is-type-video is-provider-youtube wp-block-embed-youtube wp-embed-aspect-4-3 wp-has-aspect-ratio\">\n<div class=\"wp-block-embed__wrapper\">\n<span class=\"lf9X\"><\/p>\n[embedded content]\n<p><\/span>\n<\/div>\n<\/figure>\n<p>The Medicare reductions didn\u2019t really make the program\u2019s financial position any better in practice, because they went to fund Obamacare. They only improved Medicare\u2019s solvency on paper\u2014practically the only thing Washington politicians care about.<\/p>\n<p>In other words, the double-counting of the Medicare \u201ccuts\u201d included in Obamacare has been the only thing keeping Medicare from acknowledging its trust fund insolvency. It\u2019s therefore entirely reasonable to call the program functionally insolvent. It in fact has been for several years.<\/p>\n<h2><strong>Rosy Economic Projections<\/strong><\/h2>\n<p>As to the immediate reason the \u201cofficial\u201d insolvency date got pushed back to 2028, the trustees\u2019 report explained that the new report estimates income, largely from payroll taxes, as 5 percent ($176 billion) higher from 2021-2028, with expenses only marginally increased.<\/p>\n<p>But that estimated increase in payroll tax revenue could prove as fleeting as the phony double-counted Obamacare \u201csavings.\u201d The Medicare actuary\u2019s office, which compiles the trustees report, admitted that it <a href=\"https:\/\/www.washingtonpost.com\/health\/2022\/06\/02\/medicare-social-security-trustees-report\/\">locked in its economic assumptions<\/a> behind this year\u2019s report in February.<\/p>\n<p>As with the Congressional Budget Office\u2019s <a href=\"https:\/\/www.cbo.gov\/system\/files\/2022-05\/57950-Outlook.pdf\">recent estimate<\/a> of the fiscal outlook for the next ten years, the Medicare actuary\u2019s estimates seem already outdated, due to the continued spike in inflation. Rising prices\u2014and rising interest rates to counteract the inflation\u2014mean that most analysts believe the <a href=\"https:\/\/www.cnbc.com\/2022\/06\/01\/jamie-dimon-says-brace-yourself-for-an-economic-hurricane-caused-by-the-fed-and-ukraine-war.html\">risk of recession has risen<\/a> since the actuary completed its assumptions in February. And if a recession hits, most or all of that $176 billion in projected additional payroll tax revenue\u2014the prime factor driving the extension of the \u201cofficial\u201d insolvency date\u2014will likely evaporate.<\/p>\n<h2><strong>Fiscal Danger Ahead<\/strong><\/h2>\n<p>The rising risk of a recession, and the looming insolvency of Medicare, represents but one of the <a href=\"https:\/\/www.wsj.com\/articles\/cbo-sounds-a-warning-of-american-fiscal-ruin-tax-increases-gdp-federal-debt-saving-work-private-investments-11652635997?mod=opinion_lead_pos10\">many challenges<\/a> the next president will have to face\u2014and none too soon. Because of the Obamacare double-counting referenced above, politicians have spent the last decade with their heads in the sand about the need to right-size Medicare. If not for the Obamacare fiscal gimmick, Donald Trump and others would not have had the luxury of claiming they <a href=\"https:\/\/www.dailysignal.com\/2015\/05\/21\/why-donald-trump-wont-touch-your-entitlements\/\">wouldn\u2019t cut anyone\u2019s Medicare<\/a>\u2014the looming insolvency would have forced them to act.<\/p>\n<p>Medicare faces challenges in the long term, too. The trustees\u2019 report also discusses how current payment levels for doctors and hospitals\u2014some of them created by Obamacare, some not\u2014will fall to <a href=\"https:\/\/www.cms.gov\/files\/document\/illustrative-alternative-scenario-2022.pdf\">unsustainably low levels<\/a> in coming decades, another way the \u201cofficial\u201d estimates significantly understate the depths of the problems the program faces.<\/p>\n<p>To put it bluntly: Washington has spent the past several decades lying to the American people, by hiding the tough choices our nation will have to face about fiscal priorities as the Baby Boomers retire. Those long-delayed choices will finally start coming due <a href=\"https:\/\/www.wsj.com\/articles\/cbo-sounds-a-warning-of-american-fiscal-ruin-tax-increases-gdp-federal-debt-saving-work-private-investments-11652635997?mod=opinion_lead_pos10\">over the next few years<\/a>. When they do, the politicians who have dodged the truth for lo these many decades better have some good answers for why they did.<\/p>\n<hr class=\"wp-block-separator\" \/>\n<div class=\"article-author-description fst-italic\">\n  Chris Jacobs is founder and CEO of Juniper Research Group, and author of the book, &#8220;<a href=\"https:\/\/www.amazon.com\/dp\/1645720020\">The Case Against Single Payer<\/a>.&#8221; He is on Twitter: <a href=\"http:\/\/www.twitter.com\/chrisjacobshc\">@chrisjacobsHC<\/a>. Previously he was a senior health policy analyst for the Texas Public Policy Foundation, a senior policy analyst in The Heritage Foundation\u2019s Center for Health Policy Studies, and a senior policy analyst with the Joint Economic Committee\u2019s Senate Republican staff. During the debate over the Patient Protection and Affordable Care Act, popularly known as Obamacare, Jacobs was a policy adviser for the House Republican Conference under then-Chairman Mike Pence. In the first two years of the law\u2019s implementation, he was a health policy analyst for the Senate Republican Policy Committee. Jacobs got his start on Capitol Hill as an intern for then-Rep. Pat Toomey (R-Pa.). He holds a bachelor\u2019s degree in political science and history from American University, where he is a part-time teacher of health policy. He currently resides in Washington, D.C.<\/div>\n","protected":false},"excerpt":{"rendered":"<p>The recently released Medicare trustees report estimates the program\u2019s Part A trust fund faces insolvency in 2028, two years later than last year\u2019s estimate. Some might think that represents a<\/p>\n","protected":false},"author":521,"featured_media":2315279,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"","fifu_image_alt":"","footnotes":""},"categories":[],"tags":[],"class_list":["post-1510151","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry"],"_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1510151","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/521"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=1510151"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1510151\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/2315279"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=1510151"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=1510151"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=1510151"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}