Medicare's main trust fund will also run out of money sooner than anticipated, with insolvency looming in 2026, or three years earlier than last year's projection, the trustees said.
The trustees forecast that 100% of benefits will be covered through 2034, after which the trust funds for Social Security, which also cover old age and disability insurance programs, will only be able to cover about 79% of benefits.
This year, the program's cost will outstrip total income by $2 billion and non-interest income by $85 billion, the report said.
The trustees report is considered an annual wake-up call for the beleaguered programs, though consensus around ways to secure their future remains elusive.More news: Guatemala rescues hampered as volcano continues to erupt
To ensure both Social Security and Medicare remain solvent for decades to come, they have three basic choices: they can raise the payroll taxes paid into the programs by both employees and employers, they can cut benefits for some or all beneficiaries, or they can do some combination of the two. "Lack-luster economic growth in previous years, coupled with an aging population, has contributed to the projected shortages for both Social Security and Medicare".
Both the cost-of-living increase and the Medicare outpatient premium are not officially determined until later in the year, and the initial projections can change.
The government says Medicare's financial problems are getting worse and Social Security's can't be ignored.
In 2017, Medicare covered 58.4 million people, with 49.5 million older than 65.More news: Fans Question Johnny Depp's Health After New Photos Surface Online
Congress has punted on the issue of shoring up the solvency for both entitlement programs for years.
The Trustees' annual report comes amid a relentless push by the GOP-controlled Congress and the Trump administration to slash Social Security benefits-along with Medicare, Medicaid, and food stamps-after delivering $1.5 trillion in tax cuts to the wealthiest Americans.
But federal deficits keep rising, and the recent Republican tax-cut bill is only expected to add to the debt.
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. The report said that if the funds are depleted, the program could pay about three-quarters of benefits.More news: Amazon Drops Chilling Trailer for Dakota Johnson's 'Suspiria'
Traditionally, most Democrats have not seen a need for immediate action.