The Social Security trust fund could build up a surplus of $7 trillion by the year 2015, five times the amount needed for a year's benefits, and $12 trillion ($2 trillion in today's dollars) by 2030. Then the fund will begin to decline as "baby boomers" begin to retire and reserves are drawn down.
Robert J. Myers, former chief actuary of Social Security, said the financial rescue package Congress passed in 1983 plus a favorable ratio of workers to retirees will create the surplus. But he warned that maintaining such a huge surplus for 20 to 30 years could harm the economy and provide a temptation for Congress to increase benefits or spend the money elsewhere. He said most experts think that the system needs reserves equal to six months' to one year's worth of benefits.
Myers' solution: "An automatic adjustment procedure that would lower the tax rates when the fund balance exceeds 50 to 60 percent of annual outgo. Similarly, the tax rates would be increased later when the fund balance falls under this."
NIH GRANTS . . .The Senate budget resolution, as a result of a compromise worked out by Sen. Lowell P. Weicker Jr. (R-Conn.), the Senate GOP leadership and Office of Management and Budget Director David A. Stockman, calls for 6,000 new and competing research grants in fiscal 1986 for the National Institutes of Health. Weicker initially had wanted 6,500 grants while the OMB wanted 5,000. Although it was not spelled out in action on the resolution, sources said the understanding also tentatively provides 6,000 grants for 1985. Congress last year approved funding for 6,500 grants but the budget office wanted to hold them to 5,000. The unused portion of the 1985 budget authority would be used to pay the costs of this year's new grants in future years. Whether the House will agree to 6,000 annually for two years is not clear.
PINCHING PENNIES IN HEALTH PROGRAMS . . . The Health and Human Services Department's Health Care Financing Administration and the California Health and Welfare Agency are hosting a conference June 19-21 on how to pinch pennies in the Medicare and Medicaid programs. But financial arrangements for the conference are not exactly spare.
The registration fee is $600 if paid at the conference or $475 in advance, with discounts for other people in the same party. Congressional health policy experts have been told that their registration fee will not be waived, as is often done at such conferences.
Rooms at the Westin Bonaventure Hotel in Los Angeles, the conference headquarters, go for $68 a day, suites for $195 and up, and suites at the nearby Sheraton Grande ("Butler Service on Every Floor") for $280 and up.
As many as 2,000 people are expected to attend and hear HHS Secretary Margaret M. Heckler, California Gov. George Deukmejian (R), HCFA Administrator Carolyne K. Davis and former HHS undersecretary David B. Swoap, now head of the California health agency, discuss "Harnessing Health Care Costs," "Curbing Cost Escalation in Health Care" and similar subjects. The program brochure notes that expenses are tax-deductible as an educational expense.
Conference arrangements have been handled by Promotional Planning Inc. of Langhorne, Pa., which organizes conferences. The firm submitted the winning bid to run the conference, and HHS provided $80,000 for printing and mailing costs. Promotional Planning is to cover all costs out of registration fees and are to absorb the loss if the fees don't cover the costs. "If I hit 1,700 people I'll break even," a spokesman for the firm said. "At 2,000 people, I'll make $50,000 to $75,000 if we're lucky."
REJOINING THE CLUB . . . New York State officials say they will not ask Medicare to renew the waiver that allows them to run their own hospital cost-control system for Medicare patients instead of being part of the national system. They say the New York system, which also applies to non-Medicare patients, is so effective that the federal government is paying New York hospitals up to $400 million a year less for the care of Medicare patients than it would under the national Medicare rules.
Rejoining the national system would allow the hospitals to recapture that $400 million, but officials say the hospitals won't keep all of it. The state will keep much of it by reducing payments to the hospitals for charity and Medicaid patients and continuing to limit what the hospitals can receive for treating private non-Medicare patients.