Last week, the Social Security and Medicare Trustees reports were released. As many have noted, the two funds are predicted to have pay out more than their dedicated taxes raise in about two decades. Same as it ever was. Regular readers will know that my own Sisyphean boulder is trying to get people to realize that long-term budget predictions are a mug’s game. But I just can’t help myself. Here’s what the 2013 Medicare report says (boldface mine; pp. 34 – 35 of the pdf, not the page numbering):
Under the intermediate assumptions, the assets of the HI trust fund would continue decreasing as a percentage of annual expenditures from the beginning of 2013 through the short range projection period and would be depleted in 2026, as illustrated in figure II.E1. If assets were depleted , Medicare could pay health plans and providers only to the extent allowed by ongoing tax revenues — and these revenues would be inadequate to fully cover costs. Beneficiary access to health care services would rapidly be curtailed. To date, Congress has never allowed the HI trust fund to become depleted.
There is substantial uncertainty in the economic, demographic, and health care projection factors for HI trust fund expenditures and revenues. Accordingly, under current law the date of HI trust fund depletion could differ substantially in either direction from the 2026 intermediate estimate. Under the low – cost assumptions, trust fund assets would start to increase in 2014 and continue to increase throughout the projection period if the provisions of current law were to continue unchanged. Under the high – cost assumptions, however, asset depletion would occur in 2019.<
Basically, depending on what assumptions you want to make, the Trust Fund will either go bust in six years, or, erm, never. This level of inaccuracy rivals that of value-added testing. Given that we’ve predicting the doom of both Social Security and Medicare for years and that hasn’t happened yet, extreme pessimism probably isn’t warranted (though the Republicans and Conservadems are doing their damnedest…).
Just something to keep in mind.