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An Update on Medicare’s Finances

The brief’s key findings are:

  • The headline from the 2018 Trustees Report was an earlier depletion date for the Hospital Insurance (HI) trust fund, suggesting Medicare faces growing trouble.
  • However, the trust fund reserves are small compared to HI expenditures, and the HI component only accounts for about a third of the Medicare system.
  • In fact, Medicare’s outlook is considerably better than it was a decade ago, even under projections that assume policymakers curb some recent cost controls.
  • Despite the improvement, Medicare does face financing challenges because it:
    • has to operate within the very expensive U.S. health care system;
    • requires beneficiaries to pay substantial out-of-pocket costs; and
    • has some serious gaps in insurance protection.

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Dallas Police & Fire sues Buck over DROP administration, funding issues

Dallas Police & Fire Pension System filed a lawsuit against Buck Consultants, its longtime actuary and adviser, claiming the firm failed to provide proper counsel as the pension fund lost substantial sums of money due to a flawed DROP program.

The $2.1 billion pension fund faulted Buck for issues stemming from the pension fund’s deferred retirement option plan, which it adopted in 1993 after consultation with Buck. The program allowed members to contribute retirement funds while remaining on active duty, with a guaranteed rate of return of no less than 8%.

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In Less Than 10 Years, America Will Have 17 ‘Superaged’ States

Federal, state and local government officials haven’t been talking much during the midterm election cycle talk about the fiscal stresses governments face from aging populations, but it will be difficult not to discuss it more in the coming years.

According to the U.S. Census Bureau, by 2026 unprecedented aging demographics will push 17 U.S. states into a category none are currently in: “superaged.” That includes Florida, Michigan, Pennsylvania and Ohio.

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