Social Security is about to pay out more money than it earns for the first time in decades, according to the 2019 OASDI Trustees Report, released today. By 2020, obligations to retirees and disabled Americans will cost more than Social Security's revenue from payroll taxes, taxes on benefits, and interest earned on investments. That imbalance is expected to continue until the SSA's main trust fund-the Old-Age and Survivors Insurance fund-is depleted in 2034, at which time scheduled benefits would be cut 23 percent to retirees. This year's projection is inline with last year's Trustees Report. Social Security's other trust fund-the much smaller Disability Insurance Fund-is in much better shape than previously projected. The DI Fund is now projected to remain solvent to 2052, a 20-year improvement over last year's projection, owed to the continued decline of disability applications since the end of the Great Recession. Together, OASI and DI funds will be depleted in 2035, a one-year improvement over last year's projection, the report says. But that headline is potentially misleading. The report notes that under current law, the cuts in scheduled benefits begin separately for each program: 2034 for the OASI program, and 2052 for the DI program. Last time SS was revenue negative, Congress moved to reform funding When Social Security begins drawing down its $2.9 trillion in reserves next year, it will be the first time the agency will pay out more than it takes in since 1982. That underscored the imminent funding issues Social Security was then facing, and spurred amendments that were signed into law in 1983 that included the taxation of some Social Security benefits, an increase in the retirement age, and coverage of federal employees. Back then, control of Congress was divided as it is today-Democrats controlled the House of Representatives, Republicans controlled the Senate. The amendments were passed with bipartisan support and signed in to law by President Regan. While Democrats and Republicans have introduced bills to reform Social Security in recent Congressional sessions, and the House Ways and Means Committee held a productive hearing on reform at the outset of the 116th Congress, the parties are at loggerheads over a path to solvency. Democratic proposals include a phased-in increase of the payroll tax for all Americans, and an expansion of benefits for the most vulnerable Americans. Republican proposals favor raising the retirement age. As it has in previous years, the Trustees Report urges immediate attention from lawmakers, and warns against the costs of kicking the can down the road. "The Trustees recommend that lawmakers address the projected trust fund shortfalls in a timely way in order to phase in necessary changes gradually and give workers and beneficiaries time to adjust to them," this year's report says. "Implementing changes sooner rather than later would allow more generations to share in the needed revenue increases or reductions in scheduled benefits." Social Security's 75-year actuarial deficit is $13.9 trillion. In order for its two funds to remain solvent over that period, payroll taxes would have to be increased by 2.7 percent to 15.1 percent, or benefits would have to be reduced by 17 percent for all current and future beneficiaries, or a combination of each approach could be applied, the report says. "If actions are deferred for several years, the changes necessary to maintain Social Security solvency become concentrated on fewer years and fewer generations," the Trustees say. Inside the numbers An estimated 176 million people had earnings covered by payroll and Social Security taxes in 2018. About 52.7 million people received $845 billion in retirement benefits, and 10.2 million received $143.7 billion in disability payments. Social Security is expected to pay benefits to about 64 million beneficiaries in 2019. The OASI program took in $715.9 billion in payroll taxes, $34.5 billion in taxes on Social Security benefits, and $80.7 billion in interest payments on invested reserves. The DI program took in $169.2 billion in payroll taxes, accounting for most of its $25.5 billion surplus in 2018. Both programs are facing considerable demographic headwinds with the retirement of baby boomers. There were about 2.8 workers for every Social Security beneficiary in 2018. That ratio was 3.2 to 3.4 between 1974 and 2008. It is expected to continue to decline through 2035, when it will be 2.2 workers per beneficiary, as the baby boomer generation becomes fully retired.

Aetna, Cigna, United Healthcare lead the change in group health insurance for small employers; however, the next step is to take advantage of how they make their profits. Level funding is an effective first step in controlling group health premiums for small employers. However, it's essential to not overlook the basic foundation of all insurance and obtain what may be the most significant savings opportunity. Level funded plans are considered fair insurance as they return a percentage of the premium with good claims experience but do not charge you more than the planned premium with bad claims experience. Level funded plans also bypass many of the taxes that the Affordable Care Act applies on fully insured plans. Initially, the quoted premium savings is obtained by considering the health of the participants and past medical history. To clarify how level funding plans are designed, you must look at three premium components.

1. Stop-loss premiums protect any one person in the group or the overall group from a loss over a specific amount.
2. The claims pool is roughly one-third of the overall premium and is the expected claims that are shared with the employer at the end of the year with low medical expense.
3. The remaining premiums are used for administration including, network access, PBMs, claims adjudication, commissions, and support.

To take the next step, you need an experienced consultant since it's essential that privacy is maintained and laws are followed. Simplify the process by using a high deductible, fully insured plan. The ACA law caps the maximum risk per participant, similar to specific stop-loss insurance used with a level-funded plan. An employer spreads the risk on the 20% of participants who are expected to have high claims amongst their entire group. Allow me to review your current plan, the demographics of your group, calculate your expected claims and design a plan for efficient saving. You will be shocked to know how much of your savings get left on the table!

Medicare for all is a dream which can never be achieved. Why talk about adding benefits when the Congressional Research Service June 2018 study projects that the trust will be insolvent by 2026? Doubling down by putting more people in the program is our politicians' way of not addressing the issue. The number one-way Medicare and Medicare save money are by paying far less than traditional insurance to doctor and hospitals. Will doctors continue to practice medicine or the pharmaceutical companies invest in R&D if they deliver services at a loss? In 2014, there were 46.2 million Americans aged 65 and over and 6.2 million of the population aged 85 and over. The number of people aged 65 and older is expected to increase significantly and double in numbers, reaching 98.2 million by 2060. As for the number of people aged 85 and older, they are expected to triple and reach 19.7 million. How do our lawmakers plan to cover this cost before considering covering more people? Obamacare was an entitlement expansion on Medicaid, and no one is addressing the unpaid cost of this program. The Children Health Insurance Program is the number one insurance for children aged 0 to 18, and this program will bankrupt every state if ordered to pay the entire cost. Unfortunately, our politicians continue to add entitlements and not pay for the existing programs. Our great country cannot figure out how to pay off the current $22 trillion in debt, which means the average American household carries a debt of $137,063. The U.S. Census Bureau reports the median household income was just $59,039 last year. I won't even go near the Green initiative when the same politicians want to pass an infrastructure bill adding to the current debt. We are two interest points away from having an eye-opening situation as the debt interest payments at state and federal level will be too high to cover. Everyone needs to stop dreaming and face the facts.