Medicare trust funds will be insolvent starting 2026

Pearl Mccarthy
June 6, 2018

The program trustees say it will become insolvent in 2026, which is three years earlier than previously forecasted.

The report by the trustees stressed that they've said before that the fund in trouble is not adequately financed over the next 10 years. 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. Medicare trustees say the trust fund that covers Medicare Part A, which pays for hospital stays, home health services, nursing homes and hospice care, will run out of money sooner than expected.

"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.

Medical costs have long outpaced economic growth, and despite some slowdowns in cost over the past few years, that has not changed. The report says that income still needs to increase faster than the economy to cover future growth. None of those top officials was present Tuesday; an aide cited scheduling conflicts. Some 45 million retirees and six million dependents receive Social Security benefits. The public trustee posts are now unfilled.

Apple Unveils New Features To Curb Addiction To Smartphones
Apple's new " Screen Time " function aims to make people more aware of how much time they spend absorbed in their devices. Turning on do not disturb won't allow notifications on your smartphone screen until you manually reverse the settings.

President Donald Trump campaigned on a promise not to cut Social Security or Medicare, but he hasn't offered a blueprint for either program.

Democrats want to expand the safety net by spending more on health care and education. The program's trustees said the shortfall trend could worsen in the decades to come.

Higher deficits would leave less maneuvering room for policymakers when the day of reckoning finally arrives for Social Security and Medicare.

In principle, the U.S.is supposed to be paying forward its Social Security and Medicare obligations by building up trust funds to cover future costs. That money is invested in special government securities, which also collect interest.

Other reports by

Discuss This Article

FOLLOW OUR NEWSPAPER