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The Statements of Social Insurance provide estimates of the status of the most significant social insurance programs: Social Security, Medicare, Railroad Retirement, and Black Lung social insurance programs. They are administered by the Social Security Administration (SSA), HHS, the Railroad Retirement Board (RRB), and the Department of Labor (DOL), respectively. The estimates are actuarial present values 2of the projections and are based on the economic and demographic assumptions representing the trustees’ reasonable estimates as set forth in the relevant Social Security and Medicare trustees’ reports and in the agency financial report of HHS and DOL (Black Lung) and in the relevant agency performance and accountability reports for the SSA and RRB. The projections are based on the continuation of program provisions contained in current law.
The magnitude and complexity of social insurance programs, coupled with the extreme sensitivity of projections relating to the many assumptions of the programs, produce a wide range of possible results. In preparing the Statements of Social Insurance, Government management considers and selects assumptions and data that it believes provide a reasonable basis for the assertions in the statements. However, because of the large number of factors that affect the Statements of Social Insurance and the fact that such assumptions are inherently subject to substantial uncertainty (arising from the likelihood of future events, significant uncertainties, and contingencies), there will be differences between the estimates in the Statements of Social Insurance and the actual results, and those differences may be material. Note 26—Social Insurancedescribes the social insurance programs, reports long-range estimates that can be used to assess the financial condition of the programs, and explains some of the factors that impact the various programs. The Statements of Changes in Social Insurance Amounts reconcile the change between the current valuation period and the prior valuation period.
| (In billions of dollars) | Social Securtiy |
Medicare HI |
Medicare SMI |
Other (e.g. Railroad Retirement) |
Total |
|---|---|---|---|---|---|
| Net present value (NPV) of future revenue less future expenditures for current and future participants (the “open group”) over the next 75 years, beginning of the year | (9,157) | (3,252) | (21,320) | (101) | (33,830) |
| Reasons for changes in the NPV during the year: |
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| Changes in valuation period | (473) | (125) | (1,013) | (2) | (1,613) |
| Changes in demographic data and assumptions |
(140) | (97) | 752 | 3 | 518 |
| Changes in economic data and assumptions | (1,037) | - | - | (2) | (1,039) |
| Changes in law or policy | - | 153 | 40 | - | 193 |
| Changes in methodology and programmatic data | (471) | - | - | - | (471) |
| Changes in economic and other healthcare assumptions |
- | (2,546) | (55) | - | (2,601) |
| Change in projection base | - | 286 | 3 | - | 289 |
| Net change in open group measure | (2,121) | (2,329) | (273) | (1) | (4,724) |
| Open group measure, end of year | (11,278) | (5,581) | (21,593) | (102) | (38,554) |
Totals may
not equal the sum of components due to rounding. The accompanying notes are an integral part of these financial statements. |
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| (In billions of dollars) | Social Securtiy |
Medicare HI |
Medicare SMI |
Other (e.g. Railroad Retirement) |
Total |
|---|---|---|---|---|---|
| Net present value (NPV) of future revenue less future expenditures for current and future participants (the "open group") over the next 75 years, beginning of the year | (7,947) | (2,683) | (20,130) | (97) | (30,857) |
| Reasons for changes in the NPV during the year: |
|||||
| Changes in valuation period | (436) | (112) | (968) | (2) | (1,518) |
| Changes in demographic data and assumptions |
(688) | (112) | (59) | - | (859) |
| Changes in economic data and assumptions | (143) | - | - | (2) | (145) |
| Changes in law or policy | - | - | (14) | - | (14) |
| Changes in methodology and programmatic data |
56 | - | - | - | 56 |
| Changes in economic and other healthcare assumptions |
- | 185 | (648) | - | (463) |
| Change in projection base | - | (531) | 500 | - | (31) |
| Net change in open group measure | (1,211) | (570) | (1,189) | (4) | (2,974) |
| Open group measure, end of year | (9,157) | (3,252) | (21,320) | (101) | (33,830) |
Totals may
not equal the sum of components due to rounding. The accompanying notes are an integral part of these financial statements. |
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2 Present values recognize that a dollar paid or collected in the future is worth less than a dollar today, because a dollar today could be invested and earn interest. To calculate a present value, future amounts are thus reduced using an assumed interest rate, and those reduced amounts are summed. (Back to Content)
