Published: Wed, June 06, 2018
Medicine | By Douglas Stevenson

Medicare and Social Security Finances Worsened Last Year

The combined reserves of the Social Security trust funds are expected to be depleted in 2034, the same time frame projected previous year, according to the latest annual report from the Social Security and Medicare Board of Trustees released Tuesday.

"As in past years, the Trustees have determined that the fund is not adequately financed over the next 10 years", the report said.

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.

Don't worry, that doesn't mean that Mom and Dad won't have any Social Security to rely on after 2034. Medicare provides health insurance for about 60 million people, most of whom are age 65 or older. Medicare Part B, which covers outpatient visits, and Part D, which pays for most prescription drugs, are paid for in part by general revenue and by individuals' premiums.

Treasury Secretary Steven Mnuchin said the latest report shows that Social Security and Medicare remain secure, but long-term problems persist.

The White House claims the long-running economic boom will help secure Medicare and Social Security's future.

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

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

"The historical reluctance of lawmakers to reduce benefits for current beneficiaries means that each successive year of delay excludes another large cohort of baby boomer retirees from contributing to the solution, thereby reducing the numbers of those among whom the burden of balancing system finances must be spread", the two former trustees warned.

Social Security recipients are likely to see a cost of living increase of about 2.4 percent next year, working out to roughly $31 a month, government experts said.

But speaking to reporters on Tuesday, Treasury officials said the cuts were set to decrease revenues for both programs.

Democrats, meanwhile, want to extend the social safety net by spending more on health care and education.

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.

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