The Ridgway Record – The Daily Press, – The Kane Republican, Friday, July 24, 2015 -3B


5 things from annual check-up for Social Security, Medicare


WASHINGTON (AP) — Looking at the big picture, the financial health of So- cial Security and Medicare doesn't appear to have worsened. Wednesday's annual check-up found that Social Security's retirement trust fund has enough money to pay full benefits until 2035, a year later than previous- ly projected. Medicare's gi- ant trust fund for inpatient care won't be exhausted until 2030, the same date as last year's report. But below those reassur- ing projections, program trustees said there's cause for concern. Some 11 mil- lion people who receive So- cial Security disability face steep benefit cuts next year — unless Congress acts. Medicare's outpatient pre- mium could go up dramati- cally for a subset of benefi- ciaries — about 7.5 million people.


And they warned that the time is now to make changes in the long-term fi- nancing of both programs, when benefit cuts and tax increases can be phased in gradually.


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Here are five things you need to know about the 2015 Social Security and Medicare trustees reports: Alarms for disability program


The disability trust fund is expected to run out of money late next year, right in the middle of a presiden- tial election. That would trigger an automatic 19 percent cut in benefits. The average monthly benefit for disabled work- ers and their families is $1,017. That means the typical beneficiary would see their benefits reduced by $193 a month.


The report said the "ur- gent threat" of insolvency requires prompt action by Congress.


There is an easy fix available: Congress could shift tax revenue from So- cial Security's much larger


retirement fund, as it has done in the past.


President Barack Obama supports the move. But Re- publicans say they want changes in the program to reduce fraud and to en- courage disabled workers to re-enter the work force. Cost-of-living increase unlikely


Unlike most private pen- sions, Social Security ben- efits have built-in inflation protection.


The average Social Se- curity check is $1,220 a month, and beneficiaries count on their annual cost-of-living adjustment, or COLA, to preserve the purchasing power of their benefits.


But the trustees project- ed there will be no COLA at the end of this year. It would mark only the third year without an increase since automatic adjust- ments were adopted in 1975.


Things could change be- fore the end of the year. Program economists are constantly crunching num- bers to track fluctuating prices. But if there's no adjust-


ment for 2016, some people will face dramatically high- er Medicare premiums. Medicare premiums spike?


Some beneficiaries may face steep premium in- creases for Medicare Part B, which provides coverage for outpatient services. For about 70 percent of beneficiaries, premium in- creases cannot exceed the dollar amount of their So- cial Security cost-of-living adjustment. Because no COLA is currently expected for 2016, increased costs of outpatient coverage would have to be spread among the remaining 30 percent. That would result in an increase of about $54 in the base premium, bring- ing it to $159.30 a month. It works out to paying 52 percent more.


Those who would feel the


impact include 2.8 million new beneficiaries, 1.6 mil- lion who pay the premium directly instead of having it deducted from their Social Security, and 3.1 million upper


income beneficia-


ries, those making at least $85,000 for an individual and $170,000 for a married couple.


The increases for upper- income beneficiaries would be higher, up to $174 a month for those in the highest bracket.


State budgets would also take a hit, because states pay the Part B premium for low-income beneficiaries who have dual Medicare and Medicaid coverage. Health and Human Ser- vices Secretary Sylvia M. Burwell said no final deci- sion has been made, and that premium increases are expected to average less than 5 percent a year over the long run.


Price of postponement Every year the Social Se- curity and Medicare trust- ees deliver a sober warn- ing: neither program is adequately financed for the long haul.


That means some combi- nation of benefit cuts, tax increases, or in Medicare's case, reining in health care costs, is needed to keep the programs in balance. "Don't focus on the date of trust fund depletion," trustee Robert Reischauer admonished reporters. "Under current law, both of these vitally important programs are on a finan- cially unsustainable path." An economist, Reischauer is one of two so-called "pub- lic" trustees. The other four are high-ranking adminis- tration officials.


His fellow public trust- ee, economist Charles Blahous, said the travails of the disability program should be a lesson to all. "The last thing we need is continual delay," he said. Reischauer is a Demo-


SEE SECURITY ON PAGE 4B


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