On Tuesday, Social Security and Medicare Board of Trustees released their 2018 Annual Report which estimated significant shortfalls in Medicare as early as 2026 - three years earlier than last projected - and that the Social Security Trust Fund will be depleted by 2034, the same year as previously reported, but concerning all the same.
The trustees report is considered an annual wake-up call for the beleaguered programs, though consensus around ways to secure their future remains elusive. The hospital trust fund helps pay for hospital stays and some home health services, as well as nursing home and hospice care.
The report says Social Security will become insolvent in 2034 - no change from the projection past year. "The programs remain secure", he said.
"However, certain long-term issues persist", the statement added.More news: Judge, Stanton homer in 13th to lift Yankees over Jays
Social Security's total cost is projected, for the first time since 1982, to exceed its total income including both tax receipts and interest in 2018 and to remain higher throughout the projection period, the report said.
Two other Medicare funds - Part B, which covers doctor and outpatient visits and Part D, which covers prescription drugs - are reset each year based on projected costs.
The report did not change its insolvency date for Social Security, projecting it has enough funding until 2034. The average monthly payment is $1,294 for all beneficiaries.
Medicare provides health coverage to more than 58 million people, including seniors and people with disabilities.More news: KFC To Test Vegetarian Alternative To Famous Original Chicken Recipe
Together, the two programs have been credited with dramatically reducing poverty among older people and extending life expectancy for Americans. Social Security and Medicare account for 42% of all federal spending.
But demands on both programs are increasing as America ages.
Medicare's problems are widely seen as more hard to solve. It's also the unpredictability of health care costs, which can be jolted by high-priced breakthrough cures, and which regularly outpace the overall rate of economic growth. Medicare spent $710 billion in 2017, according to the report, making it the single biggest purchaser of health services in the U.S. The trustees include Treasury Secretary Steven Mnuchin and Health and Human Services Secretary Alex Azar. None of those top officials was present Tuesday; an aide cited scheduling conflicts. The public trustee posts are now unfilled. The White House said the cuts would offset the initial drop in government revenue by spurring greater economic growth.
Democrats have for months asserted that Republicans would use the deficit - swollen by tax cuts - as "an excuse to cut Social Security and Medicare", in the words of Sen. That means it now must start drawing down principal in the trust fund to continue paying promised benefits in full.More news: Any agreement with North Korea will be 'spur of the moment'
Trustees said the trust fund for hospital expenses is not sufficiently financed over the next decade. But now that Ryan is leaving Congress, it's unclear who will take up the mantle for budget hawks. Their formula is likely to involve tax increases to help keep the programs solvent.