Published: Sun, June 10, 2018
Medicine | By Douglas Stevenson

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

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

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.

The updates on the health of the two largest United States entitlement programs were the first since December's sweeping tax cuts, which the White House said would increase growth, offsetting lost tax revenues, something economists doubt.

However, as now projected, it is highly unlikely that economic growth absent larger reforms could solve the programs' huge budget quagmire.

"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.

The good news is, Social Security isn't projected to run short of funds any sooner than it was a year ago.

At the times the combined reserves are depleted the continuing income of the trust funds would be sufficient to pay 79 percent of scheduled benefits.

For the first time since 1982 Social Security's costs will exceed its payroll income plus interest from the $2.9 trillion trust funds.

"Social Security and Medicare are the federal government's two largest programs, and millions of Americans heavily rely on their benefits". The average monthly payment is $1,294 for all beneficiaries. Medicare provides health insurance for about 60 million people, most of whom are age 65 or older. Nor has he endorsed higher taxes to finance the programs, as some Democrats have suggested.

Because of the deterioration in Medicare's finances, officials said the Trump administration will be required by law to send Congress a plan next year to address the problems, after the president's budget is submitted.

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

"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". Mnuchin is one of the trustees of Social Security and Medicare, a group that includes three Trump Cabinet officers and that released the annual report.

Medicare's financial condition has taken a turn for the worse following higher-than-expected hospital spending and reduced payroll taxes that fund the program, the federal government reported Tuesday.

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

At the same time, it said, outlays from Medicare's hospital trust fund "are expected to be higher than last year's estimates due to higher-than-anticipated spending in 2017, legislation that increases hospital spending", and higher payments to private Medicare Advantage plans. Medicare "is on track to meet its obligations to beneficiaries well into the next decade". Charles Schumer of NY, the Democratic leader. This deficit will continue as the baby-boom population ages further expanding rolls. Medicare is widely seen as a more hard problem that goes beyond the growing number of baby boomers retiring.

Their costs, however, are scheduledto grow from 2.1% of GDP in 2017 to 3.6% in 2037. That works out to about $31 a month.

Meanwhile, the trustees project that both Medicare Part B outpatient care and the Part D prescription drug program will remain adequately financed into the "indefinite future" with money from general revenues and beneficiary premiums.

The annual funding update marks the first such report since Congress did away with that panel, which was created to cut Medicare costs if spending grew too fast.

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