Medicare to Become Insolvent In 8 Years, Social Security in 16

Report warns Medicare will become insolvent in 2026

The Social Security Administration's main campus is seen in Woodlawn Md

The country's main welfare program for retirees, Social Security, also faces an uncertain future.

The annual Trustees Report provided a detailed overview of the financial outlook for Social Security's combined Old-Age, Survivors, and Disability Insurance (OASDI) Trust Funds in the coming years, and further indicated that the Trust Funds have substantial surpluses that should fully cover administrative costs and benefits for seniors, individuals with disabilities, and survivors of deceased beneficiaries until 2034-the same year as previously indicated in 2017.

A separate projection released on Tuesday showed it will become insolvent in 2034 - the same estimate as past year.

That's because, according to the report, the government will collect less in income taxes, meaning less money will flow into the Medicare trust fund.

The trustees urged Congress to consider options to reduce or eliminate the long-term financing shortfalls in Social Security and Medicare "as soon as possible".

The twin warnings come as Congress has cut revenue and boosted spending - moves that, analysts say, will leave the government's finances struggling for years to come.

Before the Affordable Care Act was passed, the trustees had projected the Part A trust fund would run dry this year.

"The current trajectories in health spending are both unsustainable and unmatched by increases in quality", Alex Azar, the secretary of health and human services and a trustee of Medicare and Social Security, said Tuesday. "The programs remain secure", Mnuchin said in response to the report.

"However, certain long-term issues persist", the statement added.

In 1960, there were about five workers for every Social Security beneficiary. And the number of people on Social Security is expected to climb to 91 million, from 62 million, in the same period.

Why? Retirees, she said, "are experiencing cost increases in common household expenditures that are growing several times faster than 3%", a trend that has been consistent over the past 8 years, and will continue into 2019.

Two other Medicare funds - Part B, which covers doctor and outpatient visits and Part D, which covers prescription drugs - are reset each year based on projected costs.

"Lackluster economic growth in previous years, coupled with an aging population, has contributed to the projected shortages for both Social Security and Medicare".

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