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Pandemic will push U.S. mortality up through 2023, new government report predicts

The impact of the coronavirus pandemic on Americans’ health and lives will not end anytime soon, Medicare and Social Security trustees say

A federal report released Tuesday expects elevated mortality rates won’t return to pre-pandemic levels until 2023. (Wayne Partlow/AP)

The federal government expects U.S. mortality rates to be elevated by 15 percent over pre-pandemic norms in 2021 and not return to normal levels until 2023, according to a report released Tuesday by the trustees of the Social Security and Medicare programs.

The trustees concluded that these elevated mortality rates, along with lower immigration and depressed fertility rates, have had a significant effect on the trust funds supporting both programs in the short term. But the virus’ long-term effects on America’s retirement and health-care systems remain unclear, as the pandemic still appears far from over.

More than 639,000 Americans have died during the coronavirus pandemic that began in early 2020, and case levels have increased in recent weeks. Deaths are also increasing but vaccinations against the virus should keep total mortality well below peak levels of more than 3,300 per day that the nation experienced in January, experts believe.

The Centers for Disease Control and Prevention estimates that since Feb. 1, 2020, the United States has suffered between 613,000 and 783,000 more deaths than it typically would in that time. These deaths are from covid-19, the disease caused by the coronavirus, and other causes.

There was also a sharp drop in fertility rates last year that accelerated a preexisting downward trend. Federal data analyzed by researchers with the Brookings Institution determined that there were 53.9 births per 1,000 women in the last quarter of 2020, compared to 57.9 annualized births per 1,000 women in the last quarter of 2019.

Senior administration officials described opposing forces that make it hard to determine how exactly the pandemic could effect the country’s retirement system after 2024.

On one hand, the people who succumbed to the virus were disproportionately old, one official said, meaning that the surviving population may be somewhat healthier than had been projected, and hence cheaper to care for in the long-run. But at the same time, long-term health problems associated with the coronavirus could persist for some survivors.

The U.S. birthrate fell 4 percent in 2020, the biggest annual decrease in decades, an indication that the pandemic has accelerated the country’s existing downward trend in fertility.

Provisional data released in May by the CDC shows the birthrate in 2020 dropped for the sixth consecutive year. The steepest decline occurred late in the year, when the first babies conceived during the U.S. outbreak would have been born. The U.S. birthrate fell across races, ethnicities and almost all age groups. Roughly 3.6 million babies were born in the United States in 2020, a decline from about 3.75 million in 2019. That was the lowest number of births since 1979 and the largest one-year drop in births, in percentage terms, since 1965, the year the baby boom ended.

The latest projections are from an annual report signed by four trustees responsible for tracking the health of two major U.S. trust funds supporting both Medicare and Social Security. The trustees include Treasury Secretary Janet L. Yellen, Labor Secretary Marty Walsh, acting Social Security Administration commissioner Kilolo Kijakazi, and Health and Human Services Secretary Xavier Becerra.

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“We don’t know what the long-term effects are,” said a senior administration official who spoke on the condition of anonymity to describe the report.

Medicare is the country’s government-run health-care system primarily for people over the age of 65, as well as younger people with disabilities.

Both Medicare and Social Security are under pressure from long-standing demographic changes. Aging baby boomers are placing an increasing strain on the system as they reach retirement age, leave the workforce and consume more health-care services. At the same time, declining fertility rates mean the share of the U.S. working population will diminish over the next several decades. The Medicare trust fund faces the most near-term economic challenges.

Obesity among children age 5 to 11 increases during pandemic.

The trustees’ annual reports have repeatedly warned about the encroaching insolvency of Medicare. But subsequent administrations have failed to significantly alter the program in a way that would decisively ensure its long-term solvency.

The trustees estimated that the Social Security system will be able to pay its scheduled benefits on a timely basis until 2034, one year earlier than the previous year’s report had assumed. The changing forecast is from a depletion in tax income associated with the economic crisis, said a senior administration official familiar with the analysis.

Some budget hawks and fiscal conservatives view Medicare and Social Security as unaffordable entitlements that should be reined in rather than expanded. Some Democrats, meanwhile, are trying to expand the program’s eligibility requirements under a set of proposals being termed Medicare-for-all.

Perhaps owing to the program’s share of the federal budget ― and the 61 million Americans who rely on it for things as varied as prescription medication, lab tests, surgery and hospice ― efforts to modify it have been the subject of fierce partisan debate.

Another recent effort to control costs was a provision in the Affordable Care Act that established a cost-cutting panel called the Independent Payment Advisory Board, or IPAB. Falsely described by Republican critics for years as a “death panel,” IPAB was meant to rein in Medicare spending once it reached a certain threshold. But the panel’s members were never appointed, the threshold was never reached, and it was repealed in 2016 amid a broader set of efforts to dismantle the Affordable Care Act, better known as Obamacare.

The program’s financial deficits were further worsened by the repeal of an earlier excise tax on high-cost, employer-sponsored health-care plans that reduced the payroll taxes supporting the program, according to the trustees’ 2020 report.