Medicare will run out of money sooner than expected, and Social Security's financial problems can't be ignored either, the government said today in a sobering checkup on programs vital to the middle class.
"As in past years, the Trustees have determined that the fund is not adequately financed over the next 10 years", the report said.
But that may be the previous year of growth for the foreseeable future. In reality, it has been running annual deficits since 2010, and the insolvency date has moved up eight years.As the Social Security crisis keeps getting closer, the political parties are moving further away from doing anything about it.What's scary is that Social Security is relatively easy to fix when compared to Medicare, a program where the rising retirement population is interacting with growing healthcare costs. Asset reserves as of 2017 were $2.9 trillion.
The program is now expected to deplete its funds by 2026, down from last year's estimate of 2029.
Of the two programs, Medicare faces the greatest fiscal challenges as medical costs increase and the United States ages, with many baby boomers set to retire in the next several years.
In 2017, Medicare covered 58.4 million people, with 49.5 million older than 65. During the same period, about 62 million people received benefits, including retired and disabled workers, their eligible family members and survivors of deceased workers.
President Trump pledged during the 2016 campaign to leave Social Security and Medicare benefits untouched, putting him on a crash course with Republicans on Capitol Hill who have said they wanted to tackle the programs' problems by limiting future benefit increases.
Meanwhile, Medicare's hospital insurance trust fund is expected to run dry in 2026, three years earlier than what the trustees had predicted in last year's report.
"The programs remain secure", he said, adding: "The administration's economic agenda - tax cuts, regulatory reform, and improved trade agreements - will generate the long-term growth needed to help secure these programs and lead them to a more stable path".
The news was not all bad at Social Security.
House Speaker Paul Ryan, R-Wis., has always been an advocate for overhauling the programs, introducing a voucher-like system for Medicare and calling for partially privatizing Social Security.
Medicare Part A's trust fund is funded through payroll taxes, split between employer and employee.