In order to allow American doctors and healthcare providers to do the wonderful work they do, in order to ensure peace of mind for American patients and seniors, we have to be responsible about our finances. Working together, I’m confident that we’ll be able to make the difficult, but necessary, choices to address these challenges in a positive manner.
Remarks as Prepared for Delivery
Thank you, Secretary [Steven] Mnuchin.
Good afternoon everyone. It is an honor to be here today representing the Department of Health and Human Services as a trustee of Social Security and Medicare. To my fellow trustees, and all the folks at the Department of Labor, the Department of the Treasury, HHS and the Social Security Administration, thank you for your hard work in administering and overseeing these crucial programs.
As both a physician who treated seniors on Medicare and as someone who is just a few short years away from being a Medicare beneficiary, I would like to think I bring a unique perspective to this discussion.
But I am here today not as Dr. Price or Secretary Price, but as a trustee of these crucial programs.
The job of the trustees is to safeguard and preserve the programs and their trust funds for the Americans who rely on them today and who will rely on them tomorrow. It is a serious, solemn duty.
The Medicare program is crucial to ensuring that Americans receive the care they need in their retirement and twilight years.
Due to innovation and quality healthcare services, we’re living a lot longer. Because of my generation, the boomers, the number of Medicare recipients grows daily by thousands.
Helping seniors achieve the dignity and security they deserve has long been a cornerstone of our social contract in America: Although Medicare is a sprightly 51 years old, when my grandfather graduated medical school in 1908, one of the major expenditures of the federal government was old-age pensions – for Civil War veterans.
But the entire federal budget in 1908 was just $602 million. In 2016, total expenditures on Medicare alone were $679 billion, covering 56.8 million Americans.
As Secretary Mnuchin said, Medicare spending growth in 2016 was slightly lower than expected, especially in Medicare Part A — the Hospital Insurance Trust Fund. Due to that slower growth, the depletion date of the Hospital Insurance Trust Fund has pushed out by one year, to 2029.
But the central finding of the Trustees Report is no different than in previous years: The Medicare Health Insurance Trust Fund, which funds Part A, is not in long-term actuarial balance. Meanwhile, spending on Part B and D is expected to grow significantly faster than national income over the next two decades.
As the Trustees Report notes, in recent years the growth in U.S. national health expenditures has slowed significantly. We don’t know entirely how much of that is due to the recent recession and how much of it may be due to other factors, such as structural changes in our healthcare system. That lower-than-expected spending has helped avoid the triggering of the Affordable Care Act’s Independent Payments Advisory Board, or IPAB.
But the trajectory is still alarming. That is why the trustees issue the warning that we do, the same warning that has been issued for years now. Congress must act to ensure the long-term fiscal survival of the Medicare and Social Security programs. There are a great many ways the situation can be addressed, but it must be addressed.
In order to allow American doctors and healthcare providers to do the wonderful work they do, in order to ensure peace of mind for American patients and seniors, we have to be responsible about our finances. Working together, I’m confident that we’ll be able to make the difficult, but necessary, choices to address these challenges in a positive manner.
It’s a privilege to be a part of that work.
Thank you. I’m pleased to turn the podium over to Labor Secretary and Trustee Alex Acosta.
