Medicare and Social Security Trustees Warn of Shortfalls

Below is an article discussing the financial state of Medicare and Social Security. There is a pending rate increase in Medicare premiums.

Medicare and Social Security Trustees Warn of Shortfalls

By ROBERT PEARJUNE 22, 2016 New York Times

Carolyn W. Colvin, the acting commissioner of Social Security, during a news conference in Washington on Wednesday. Credit Andrew Harnik/Associated Press

WASHINGTON — The Obama administration said Wednesday that the financial outlook for Medicare’s hospital insurance trust fund had deteriorated slightly in the last year and that Social Security still faced serious long-term financial problems.

The report, from the trustees of the two programs, could inject a note of fiscal reality into a presidential campaign that has given scant attention to the government’s fiscal challenges as the population ages. Hillary Clinton, the presumptive Democratic presidential nominee, has proposed increasing Social Security benefits and allowing people age 55 to 64 to “buy into” Medicare, while Donald J. Trump, the presumptive Republican nominee, has repeatedly said he would not cut either program.

Under existing law, the trustees said Wednesday, Medicare’s hospital trust fund would be depleted in 2028, two years earlier than projected in last year’s report.

In addition, they said, the Social Security trust funds for old-age benefits and disability insurance, taken together, could be depleted in 2034, the same year projected in last year’s report. Tax collections would then be sufficient to pay about three-fourths of promised benefits through 2090, they said.

Social Security and Medicare account for about 40 percent of all federal spending.

Obama administration officials often say the Affordable Care Act has slowed the growth of health spending, compared with estimates made just before the law was adopted in 2010.

But the trustees said Wednesday that the short-term financial outlook for Medicare had worsened in the last year because of changes in their assumptions and expectations. Medicare actuaries now expect higher use of inpatient hospital services, as well as lower projected improvements in workers’ productivity and lower payroll tax revenue, as a result of slower growth in wages in the next few years.

In their report, the trustees — four administration officials — said that the costs of Medicare and Social Security would grow faster than the economy through the mid-2030s because of the aging of the baby boom generation. As for Medicare, they said, “growth in expenditures per beneficiary exceeds growth in per capita gross domestic product over this time period.”

The projected growth in Medicare spending will not immediately set off automatic cuts in the program under a controversial provision of the Affordable Care Act that generally requires such cuts when spending is expected to exceed certain benchmarks. However, such cuts could be required in a few years under the trustees’ forecast.

President Obama told an audience in Elkhart, Ind., this month that Social Security should paid for “by asking the wealthiest Americans to contribute a little bit more.” Credit Zach Gibson/The New York Times

Under current projections, they said, the automatic cuts could take effect for the first time in 2019.

Medicare now spends an average of nearly $13,000 per beneficiary, and this figure is expected to exceed $16,000 in five years, the report said.

“High-cost drugs are a major driver of Medicare spending growth,” said Andrew M. Slavitt, the acting administrator of the federal Centers for Medicare and Medicaid Services.

Such projections in years past have prompted leaders in both parties to at least broach the idea of benefit cuts or tax increases for entitlement programs.

By contrast, President Obama said in Elkhart, Ind., this month that Social Security should be made “more generous,” and that “we could start paying for it by asking the wealthiest Americans to contribute a little bit more.”

Treasury Secretary Jacob J. Lew said Wednesday that he saw no contradiction there. The two objectives — ensuring the solvency of Social Security and increasing benefits — are “not at all inconsistent” if they are discussed in the context of “a broader conversation” about taxes and benefits, he said.

The report predicts that Social Security will provide a modest cost-of-living adjustment, increasing benefits by two-tenths of 1 percent next year. But, it warned of a “substantial increase” in Medicare premiums in 2017 for about 30 percent of beneficiaries. Under assumptions in the report, the standard premium, now $121.80 a month, would rise to $149, and the change could be announced just weeks before Election Day on Nov. 8.

Congress took action last year to shore up Social Security’s disability insurance trust fund, but the report says the legislation was a short-term fix. The law postponed the projected depletion of the disability trust fund by seven years, to 2023, Mr. Lew said.

Like other Democrats, Mr. Lew said the report showed the “positive impact” of the Affordable Care Act. Since the health law was signed, he said, “increases in health care costs have slowed substantially.”

Carolyn W. Colvin, the acting commissioner of Social Security, said Americans should begin a serious discussion of how to close the “future financing gap” in Social Security. Sixty million people now receive Social Security benefits totaling more than $74 billion each month. The number of Social Security beneficiaries is expected to reach 76 million by 2025.

Regulator OKs healthcare deal

Below is an article from the Associated Press which appears in the Business Briefing Section of the Los Angeles Times dated June 21, 2016.  It discusses the acquisition of Humana by Aetna.

I believe that this limits consumer choice and will be harmful in the long run.

ASSOCIATED PRESS

A California regulator is approving Aetna Inc.’s proposed acquisition of rival health insurer Humana Inc.

Shelley Rouillard, director of the California Department of Managed Health Care, announced her decision Monday.

As a condition of the approval, Aetna agreed to limit premium increases in the small group market and to allow greater state oversight of its rates. The company will also have to keep certain decision-making functions in California and must invest in various health initiatives.

The proposed $35-billion cash-and-stock deal would make Hartford, Conn.-based Aetna a sizable player in the rapidly growing Medicare Advantage business, which offers privately run versions of the federally funded healthcare program for the elderly and some people with disabilities.

The merger still requires approval by the U.S. Department of Justice.

Aetna shares rose $1.24, or 1%, to close at $122.34 on Monday. Shares of Louisville, Ky.-based Humana climbed $2.75, or 1.5%, to $189.90.

Aid-In-Dying Law In Effect June 9

An article from the Los Angeles Times, dated March 11, 2016
Terminally ill patients should be consulting with physicians now if they want to end their lives, advocates say.
BY PATRICK MCGREEVY
SACRAMENTO — California’s terminally ill patients should begin talking to physicians now if they want to end their lives, advocates said Thursday after a legislative vote triggered a June 9 start date for the End of Life Option Act.
The law, which allows doctors in California to prescribe lethal doses of drugs to terminally ill people who want to hasten their deaths, includes a time-consuming approval process that could take several weeks, said Toni Broaddus, California campaign director for the group Compassion & Choices.
Gov. Jerry Brown signed the measure last year, but it wasn’t until the Legislature adjourned a special session in Sacramento on Thursday that June 9 was set for when it becomes legal for physicians to write lethal prescriptions without fear of criminal prosecution.
Broaddus said doctors can begin explaining options and considering requests. “We are telling people to start talking to their doctor now,” said Broaddus, whose group, formerly known as the Hemlock Society, helped pushed the bill to approval and has launched a bilingual education campaign on how to participate.
Sen. Bill Monning (D-Carmel), a co-author of the law, predicted discussions will begin before June 9 as patients make sure their doctors are up to speed on the law and physicians explain all options, including those not involving the legislation, such as hospice care.
“I certainly expect it’s going to provoke conversations within families and between terminally ill patients and physicians,” Monning said.
Senate leader Kevin de León (D-Los Angeles) said on the Senate floor just before the adjournment vote Thursday that the law “ensures Californians have access to humane and compassionate options to limit suffering at the end of life.”
The bill had failed to win needed support during the regular session, so supporters introduced it in special session, allowing it to bypass committees where opposition was strong.
The approval of the law through “controversial legislative tactics” was denounced again Thursday by Tim Rosales of Californians Against Assisted Suicide.
The group “remains strongly critical of this new law, and its lack of medical oversight and actual patient safeguards,” he said. “We will continue working with our partners, including doctors, patients and disability rights organizations, to educate those impacted and vulnerable, as well as working to limit the law’s harms and prevent any expansion.”
California will be one of six states to allow physicians to prescribe lethal drugs to the terminally ill.
The California Medical Assn. published guidelines on the law in January that spell out the requirements for terminally ill patients diagnosed with less than six months to live. The patients must make two oral requests at least 15 days apart and one written request that is signed, dated and witnessed by two adults. Patients must also fill out forms that were included in the legislation.
The process can be further delayed if the physician suspects mental illness requiring an evaluation by a mental health professional.
Even if some terminally ill patients begin the process now, Broaddus said she does not expect a large number of deaths June 9. In Oregon, which previously adopted the same law, patients on average wait 45 days to take the prescribed lethal dose.
The delays are often the result of patients wanting the medication in hand just in case but waiting until the last possible moment to take it, Broaddus said.
The California Medical Assn., which was neutral on the law, does not recommend whether patients and doctors should begin discussions now, according to spokeswoman Molly Weedn. “It’s up to those doctors and their patients and the individual situations” to determine what is best for their course of care, she said. patrick.mcgreevy
@ latimes.com
Twitter: @mcgreevy99

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