A Medicare Trustees report released Tuesday finds that Medicare's trust fund will be depleted in 2026, three years earlier than last year's report found.
"The Trustees recommend that Congress and the executive branch work closely together with a sense of urgency to address the depletion of the [trust fund] and the projected growth [in spending]," the trustees report states.
"Consideration of further reforms should occur in the near future," it continues. "The sooner solutions are enacted, the more flexible and gradual they can be."
The trust fund covers costs in Medicare Part A, which covers hospital care. Care in Medicare Part B, which covers doctor visits, has a separate source of funding, collected through premiums.Alice Ollstein at TPM:
Announcing the report, Treasury Secretary Steve Mnuchin insisted that the tax cuts Republicans passed earlier this year will generate so much economic activity that they will more than cover the benefits of the tens of millions of Americans who depend on the programs.
“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,” he said. “Social Security and Medicare are the federal government’s two largest programs, and millions of Americans heavily rely on their benefits. Robust economic growth will help to ensure their lasting stability.”
Tuesday’s report shows, however, that not only has that promised growth failed to materialize, the deep tax cuts are causing the federal trust funds to deplete faster — though the biggest factor is that there are more people retiring and depending on the program than there are taxpaying workers to replace them. The report itself also acknowledged that the tax bill’s health care changes are worsening the Medicare trust fund’s financial future, citing “the repeal of the individual mandate, which increased the estimate of the number of uninsured, in turn leading to a large increase in uncompensated care payments.”David Harrison at WSJ:
he Social Security program’s costs will exceed its income this year for the first time since 1982, forcing the program to dip into its nearly $3 trillion trust fund to cover benefits.
This is three years sooner than expected a year ago, partly due to lower economic growth projections, according to the latest annual report the trustees of Social Security and Medicare released Tuesday. The program’s income comes from tax revenue and interest from its trust fund.
The trust fund will be depleted in 2034 and Social Security will no longer be able to pay its full scheduled benefits unless Congress takes action to shore up the program’s finances. Without any changes, recipients then would receive only about three-quarters of their scheduled benefits from incoming tax revenues.