US Social Security, Medicare finances worsening

Leslie Hanson
June 10, 2018

The trustees also annually weigh in on the solvency of Social Security, whose total cost is projected to exceed total income this year for the first time since 1982.

The committee noted in announcing the hearing the 2017 Trustees Report, which found that Social Security's combined trust funds will be exhausted in 2034, at which point beneficiaries would face a 23% across-the-board benefit cut unless Congress acts. Its projected income also was lower than estimated in 2017 due to lower payroll taxes attributable to lowered wages for 2017.

The trust fund for Medicare is set to become insolvent in 2026 - three years earlier than last year's official projection.

The report from program trustees says Medicare will become insolvent in 2026 - three years earlier than previously forecast. General revenues will finance roughly three-quarters of SMI costs, and premiums paid by beneficiaries nearly all of the remaining quarter. Yet the Trump Administration has not offered any further plan to address the projected shortfalls. CMS is also increasing choice in Medicare Advantage, which will have new benefit choices in 2019.

Both programs are funded by dedicated taxes that no longer generate sufficient revenue to cover either program's costs.

The long-term solvency is also affected by lawmakers' repeal in February of a controversial Obamacare effort to cut spending known as the Independent Payment Advisory Board, according to the official. Medicare recipients' monthly premiums change annually based on these costs.

This article was reprinted from with permission from the Henry J. Kaiser Family Foundation.

"We are expecting to see higher Medicare spending as a result because we aren't going to see these automatic reductions come into play", she said. Medicare "is on track to meet its obligations to beneficiaries well into the next decade".

The League reports that from January 2017 to January 2018, the costs of home heating oil has jumped 22% for people over 65, while the cost of Medigap premiums have spiked 16%.

Medicare's trust fund pays for hospital visits, nursing care and related services under what's known as Part A of the program, which was created in 1965.

Instead they'll just have to learn to get by on about three-quarters of the benefits.

Some 58.4 million Americans depend on Medicare while 62 million receive Social Security benefits (of whom 45 million are retirees, six million are dependents and another 10 million are disabled), according to the government.

The trustees said this is the third year in a row that the near-term disability cost outlook significantly improved.

Other reports by Iphone Fresh

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