A Preview of the 2018 Social Security and Medicare Trustees’ Reports
1. Do any of the reports’ core findings differ markedly from those of previous years?
This year’s reports will almost certainly reiterate longstanding findings that the financial challenges facing Social Security and Medicare are large and growing. If they remain consistent with previous reports, they will also describe the adverse consequences of delaying action to fix the financial imbalances in these critical programs upon which millions of Americans rely. It is always worth reviewing the trustees’ annual messages and report summaries to learn whether the current trustees have presented other significant new interpretations of the reports’ findings.
2. How have policy changes affected the trustees’ projections?
The policy and economic landscapes have shifted significantly since the 2017 trustees’ reports were crafted. The economy is running at or close to its potential and significant tax and budget legislation has recently been enacted. Projected income tax collections over the coming years have been reduced, and certain aspects of the Affordable Care Act (ACA)—such as the so-called “Cadillac tax,” health insurance mandate penalties, and Independent Payment Advisory Board (IPAB)—have been postponed or repealed altogether. These and other policy changes could affect the assumptions underlying the financial projections for Social Security and Medicare.
3. Have the trustees updated their projection methodologies and key assumptions?
In the past few annual reports, the trustees have not significantly modified the key assumptions that underlie their analyses—but with each passing year it becomes more likely that key assumptions will change. Updated demographic data must be incorporated into the projections. (For example, the Centers for Disease Control and Prevention recently reported that the 2017 U.S. birth rate was the lowest on record since 1987.) A number of these assumptions—from economic growth to immigration to health care cost growth – may have become outdated. Updated assumptions could change the financial projections for both programs, for better or for worse.
4. When will new public trustees be confirmed?
For the third consecutive year, no public trustees have been in place during the development of the trustees’ reports. This is as long as any vacancy in the public trustees’ positions since their inception. Lack of public oversight is always troubling, but becomes more so when, because of economic, demographic, or policy changes, the trustees must consider whether to change assumptions critical to the projections. Nominating and confirming public trustees would signal to the public that analysis of these programs’ finances continues to be developed in an objective and nonpartisan manner.