Press Release Health and Social Programs US

Trump’s Medicare Trustees Endorse Improvement in Program’s Finances Under Obama

July 13, 2017

Contact: Karen Conner, (202) 293-5380 x117Mail_Outline

July 13, 2017

For Immediate Release: July 13, 2017
Contact: Tillie McInnis, 202-293-5380 x117

Washington D.C. — Dean Baker, Co-Founder and Co-Director of the Center for Economic and Policy Research issued the following statement on the Social Security and Medicare trustees’ report:

“The largest change in the Social Security and Medicare trustees’ reports during the Obama administration was the sharp improvement in the projections of Medicare’s finances. In the 2008 Trustees report, the last one produced during the George W. Bush administration, the Medicare program was projected to have a cumulative deficit over its 75-year planning period equal to 3.54 percent of covered payroll.

“This shortfall was sharply reduced during the Obama years, partly due to changes put in place by the Affordable Care Act, and partly due to a more general slowing in the rate of growth of health care costs. As a result, the projected shortfall in the program in 2016 was just 0.73 percent of payroll, a reduction of almost 80 percent.

“At the time, some critics of the Obama administration questioned the validity of this projection and accused the Trustees, four out of six of whom are political appointees of the president, of manipulating the numbers for political purposes. These critics claimed that Obama’s trustees were deliberately understating the financial problems facing Medicare over its planning horizon.

“For this reason, the fact that the 2017 Trustees report largely confirms the drop in the shortfall projected by the Obama trustees is very important. In fact, the 2017 report shows an even better picture for Medicare, with a projected shortfall of just 0.64 percent of payroll over the 75-year planning period.

“This new projection implies that almost 82 percent of the projected shortfall was eliminated by economic and policy changes during the Obama years. In fact, this figure understates the true improvement since the 75-year horizon starting in 2017 includes years that are considerably worse for the program demographically than 75-year horizon that began in 2007.

“While this projection still indicates there will be issues maintaining full funding for Medicare if the underlying assumptions are correct, the projected shortfall is markedly smaller than what policymakers were looking at a decade ago. It now appears that we have bipartisan agreement on this fact.“


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