NCPA: Trustees Report Not Good News Afterall

Reduced Medicare Deficit Offset by Larger Entitlement Liability


The Social Security/Medicare Trustees Report announces that the hospital Part A portion of Medicare’s unfunded liability is down from last year and that the exhaustion of the trust fund has been pushed back two years. But many news reports are overlooking the bad news: Medicare’s reduced long term deficit is more than offset by the increase in the unfunded liability in other entitlements, especially the Disability program.

The total unfunded liability for both programs this year is nearly $69 trillion, more than the $66.2 trillion reported last year, according to the Trustees.

“America just got poorer,” said Pamela Villarreal, senior fellow for the National Center for Policy Analysis. “We’ve promised benefits that far exceed expected revenue. The total amount we owe is more than four times the size of the economy.”

“Furthermore, the Medicare unfunded liability may not be real,” said Devon Herrick, NCPA Senior Fellow. “The Trustees assume that all aspects of ObamaCare cuts for the elderly, including scheduled cuts in Medicare physician fees and Medicare Advantage plans, will even take place. This is by no means certain.”

This table outlines the unfunded liability for this year’s report compared to the 2012 report.

Contact: Catherine Daniell at 972-308-6479 or catherine.daniell@ncpa.org