News on Social Security and Medicare
The Social Security and Medicare Trustees released their annual report on the status of these important safety nets for the American public. Unlike wine, these programs do not get better with age. In fact, the report states, “The long-run actuarial deficits of the Social Security and Medicare programs worsened in 2012, though in each case for different reasons." Sobering, but nothing new, because the Trustees have been warning us that the current programs are unsustainable without modifications for some time.
But what is different about this report is that even the Trustees are painting an unrealistic picture of the near term financial health of Medicare. For example, the report assumes Congress will allow a 31% reduction of payments to physicians to become effective soon. Next time you are with your doctor ask him how he feels about nearly a 1/3 cut in revenue from his Medicare patients. Ask him if he will continue to see Medicare patients if the 31% cut becomes reality. I think we all know the answers to these two questions and so does Congress. Additionally, the Trustees assume that the Affordable Care Act will be considered constitutional in its entirety. Something we can't say with certainty until the Supreme Court rules on the law until this summer. Even with these two assumptions, the Trustees report that Medicare's HI Trust fund will be exhausted in 2024.
What adjustments have you made to your retirement planning in light of the status of Social Security and Medicare? If we haven't sat down and talked about your retirement plan maybe now would be a good time to start?
To read the 2012 Status of Social Security And Medicare Programs click here.
Hopefully this information will help you make smart choices with your money.