Event Recap: The Trustees' Reports on the Social Security and Medicare Trust Funds

On May 7, the Committee for a Responsible Federal Budget hosted a virtual event to discuss the status of the Medicare and Social Security Trust Funds. Just a day prior, the Social Security and Medicare Trustees released their reports detailing the status of these funds over the next 75 years.

The event included opening remarks from Committee senior vice president and senior policy director Marc Goldwein and followed with a panel discussion with experts including Michael Chernew from Harvard Medical School, Andrea Ducas from the Center for American Progress (CAP), Laura Haltzel formerly with the Congressional Research Service (CRS), and Jason Fichtner from the Bipartisan Policy Center (BPC).

A video of the full event is here or below. You can also view the slide deck used in the presentation here.

Goldwein opened the event discussing the recent Medicare and Social Security Trustees’ reports. He highlighted some key points from the Social Security report, noting that the theoretically combined Old-Age and Survivors Insurance and Disability Insurance (OASDI) trust funds will be insolvent in 2035, which is one year later than projected in the 2023 report. Separately, the Old-Age and Survivors Insurance (OASI) fund will be insolvent in 2033, while Disability Insurance (SSDI) will be solvent for the full 75-year projection window.  

The Medicare Hospital Insurance Trust Fund (HI) is projected to be insolvent in 2036 – five years later than projected in 2023. Goldwein noted that despite the improved projection, Medicare spending is still growing at a rate faster than the economy. Ultimately, the shortfalls for both Social Security and Medicare are only increasing, and the longer policymakers wait to address solvency, the more difficult the policy choices that have to be made, and we are one year further down the road without substantial progress. 

The event then moved into a panel discussion on the reports and possible solutions. 

Chernew opened by discussing his takeaways from the Medicare report. While he was encouraged by the extra five years before insolvency when compared to the 2023 report, he is still concerned by Medicare’s overall burden on the economy, especially under the Chief Actuary’s alternative scenario – which takes into account concerns that the current law trajectory for provider payments is unrealistic. Chernew also discussed the lack of just one simple explanation for the recent slowdown in Medicare spending. He noted that it is difficult to predict spending, but it is even harder to predict shifts from inpatient to outpatient services or Part A to Part B spending. 

Ducas opened by adding to Chernew’s thoughts about where to seek Medicare savings including from the Medicare Advantage program. She highlighted CAP’s most recent work on Medicare Advantage overpayments, stating that the overpayments could be as high as $127 billion per year.

Haltzel discussed the Social Security Trustees report’s projected solvency gain of one year. She noted that while birth rates continue to decline, there are less people applying for and utilizing disability insurance and thus more people in the workforce. She explained that immigration has also helped to increase taxable payroll and offered that it should be an option to improve longer-term trust fund financing. 

Fichtner started off by lamenting how policymakers have waited to act on solvency, taking easier one-step solutions off the table. More difficult choices, such as raising the retirement age and increasing taxes, are now likely. He also mentioned that the longer we wait to fix this problem, the more it will crowd out other budget priorities. Importantly, he mentioned that we must not be comfortable with disability insurance being solvent for now because it is very sensitive to economic changes and would be at risk if there were a recession. 

This discussion showed that lawmakers do have options for how to move forward with viable solutions, despite the political difficulty in making fiscally responsible choices.  

The Committee for a Responsible Federal Budget thanks all those who participated in and attended the event.