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AARP Response to Trustee Reports Cautions Medicare on Health Costs, Praises Social Security Strength

Cites wasteful spending throughout health care system; modest changes on Social Security can ensure current and future generations of Social Security beneficiaries

July 28, 2014 – While most seemed to be joyous over the report of the Medicare Trustees today, AARP pointed out the challenges facing the program and complained about the high cost of health It was more cheerful about the Social Security report, saying “Social Security remains strong as seen in today’s long term projected outlook.” Both statements were made by Executive Vice President Nancy LeaMond.

 “The Medicare Trustees report today reminds us of the financial challenges facing Medicare, along with the overall high cost of health care. With 64 million Americans expected to be enrolled in Medicare by 2020, we must do more to reduce wasteful spending throughout our health care system,” LeaMond said in her opening paragraph.

“For starters, we can reduce costs and find significant savings in Medicare and throughout the health care system with responsible solutions rather than harmful cuts. By improving care coordination and better use of technology, clamping down on high drug prices, reducing unnecessary services and other wasteful spending, and targeting fraud and abuse, for example, we would improve our health care system as a whole while saving money in Medicare.

“Some in Washington still hold on to the mistaken belief that cutting benefits or asking seniors to pay more is the best way to address Medicare’s financial challenges, even though a typical senior has an annual income of just $20,000 and already pays thousands of dollars in out of pocket health care costs.  

“But we know that millions of older Americans depend on Medicare for guaranteed, affordable health coverage, and simply cannot afford more than they already pay. That’s why AARP advocates for common sense changes that can ensure affordable health care for American families while improving the quality and delivery of care for today’s seniors and future generations.”

>> Medicare Trustees report

Social Security Remains Strong Overall and Separate from the Budget

“Social Security remains strong as seen in today’s long term projected outlook by the Social Security Trustees. While today's report reminds us that we must eventually make modest changes to ensure current and future generations of Social Security beneficiaries receive what they’ve earned, it confirms that Social Security can continue to pay full benefits for nearly two decades.

“The Trustees once again report that the combined Old Age, Survivor and Disability Insurance Trust can pay full retirement, survivor and disability benefits for approximately two more decades, and about 75% of benefits beyond that time for at least several generations more.

“While the Trustees report that the Disability Insurance Trust Fund faces a fast-approaching funding gap, the report confirms that if the combined resources of the Social Security Trust Funds are rebalanced, no beneficiary needs to face an imminent reduction in their earned benefits.

“To ensure full benefits over the long term, we must begin with a national debate on growing retirement insecurity and the critical role of Social Security in the retirement income framework. Americans of all ages deserve an honest, open, national discussion about the value of Social Security and its importance to millions of retired workers, spouses, children, veterans, and persons with disabilities. We strongly urge Congress to hold a separate debate on the solvency and adequacy of Social Security, as it is a separate, self-financed, program that people pay into throughout their lives and count on for each generation of our families.

“Too many politicians in Washington talk about harmful changes to Social Security as part of a budget debate without considering the devastating impact such changes would have on the millions of American families who depend on their earned benefits.  AARP believes it is wrong to try to balance the budget by jeopardizing Americans’ income security, especially when so many have woefully little set aside for retirement and struggle with even their own current economic security.”

>> Social Security Trustees report

More from AARP on Social Security

Fact sheets from the AARP Public Policy Institute provide both national and state data on Social Security as a key source of retirement income. Also visit www.aarp.org/ppi and search on “Social Security.”

More from AARP on Medicare

Fact sheets from the AARP Public Policy Institute provide both national and state data on Medicare. Please also visit www.aarp.org/ppi and search for “Medicare.”

 

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