Options to Prevent Elimination of Social Security and Medical Benefits
Over the last few years, the overall costs growth rates of both social security and Medicare reserves have exceeded the growth in interest and non-interest income. Thus, it is necessary to put in place various measures that will avoid elimination of these essential benefits (Blahous & Reischauer, 2015).
The first recommendation is that legislation needs to be passed to allow the expenditures of one program to be financed by another program’s taxes and reserves. This is because trustees usually emphasis on the financial status of hypothetically combined funds. In this case, shortages of one fund will be financed by the excess revenue and reserves of the other funds.
Second, the Treasury needs to intervene in the crisis by increasing the funding of the trust funds. This is because the revenue and interest income generated by the funds cannot adequately cover the increasing costs. The intervention will increase the capital base of the funds and allow them to diversify their investments. This recommendation is necessary because the number of beneficiaries has been increasing rapidly (Blahous & Reischauer, 2015).
Third, the medical reimbursement rates for physicians should be reduced. This is a cost saving measure which aims at ensuring the long-term sustainability of Medicare plan. The reduction in physician rates will lead to overall reduction in total costs. In addition, other cost cutting measures should be taken. For example, there should be extensive structural changes in the health sector. These changes should be geared towards enhancing efficiency in payment models. Lastly, there is need to improve the incentives offered by the affordable healthcare act as well as the adoption of the payment reforms initiated the private sector.
References
Blahous, C. P., & Reischauer, R. D. (2015). Social Security: 2015 trustee report. Retrieved
