Social Security is still fully funded for nearly two decades, a miniscule COLA increase in 2017 likely, and health care reform continues to preserve Medicare’s solvency.
“What’s likely to be missing in headlines about today’s Social Security Trustees Report is that the program remains well-funded with total income, again, projected to exceed expenses. However, in order to head off a benefit cut in 2034 Washington should embrace the growing movement to lift the payroll tax cap and expand benefits for the millions of seniors struggling to get by on an average $1,300 retirement benefit.
The Trustees also project there will be a tiny .2% cost of living adjustment next year yet Medicare premiums will increase in 2017. Seniors continue to see their modest Social Security benefits eaten away by growing healthcare costs which illustrates, once again, that the current Social Security COLA formula isn’t accurately measuring seniors’ expenses. Congress needs to adopt a fully developed CPI for the elderly (CPI-E) and begin work on the many Social Security expansion bills now languishing in the House and Senate.”…Max Richtman, NCPSSM President/CEO
Here are some of the key points in the 2016 Trustees Report:
- Trustees project Social Security will be able to pay full benefits until the year 2034, the same as projected last year. After that, Social Security will still have sufficient revenue to pay about 79% of benefits if no changes are made to the program.
- Social Security remains well-funded. In 2016, as the economy continues to improve, Social Security’s total income is projected to exceed its expenses. In fact, the Trustees estimate that total annual income will exceed program obligations until 2020.
- Trustees project a .2% Cost of Living Adjustment increase.
- The Trustees report there is now $2.81 trillion in the Social Security Trust Fund, which is $23 billion more than last year and that it will continue to grow by payroll contributions and interest on the Trust Fund’s assets.
On Medicare, the 2016 Trustees report shows slowing the growth of health care costs has improved Medicare’s Trust Fund
- Medicare Part B premiums are projected to increase by only a very small amount for about 70 percent of beneficiaries in 2017 from $104.90 to $107.60. The standard monthly premium is projected to increase from $121.80 to $149.00 while the annual deductible is projected to increase from $166 to $204 for all beneficiaries.
- Medicare solvency remains greatly improved thanks to passage of healthcare reform, with the program paying full benefits until 2028, 11 years later than was projected prior to passage of the Affordable Care Act. However, this is two years earlier than projected in 2015.
You can also read:
Treasury Secretary Jack Lew’s comments
The Social Security Trustees Report
The Economics Policy Institute also has a terrific description of the political spin which always accompanies the release of these reports.