Medicare, Social Security running out of money faster than expected

Medicare fund will run out by 2026 trustees say	 	 	 			Christopher Furlong  Getty Images

The solvency of the Medicare trust fund, the main U.S. public health insurance program, deteriorated over the last year and could be exhausted by 2026 - two years earlier than previously estimated.

Medicare's Hospital Insurance Trust Fund, which is known as Medicare Part A and covers inpatient care for older Americans, will be depleted in 2026, three years earlier than projected last year.

The House Ways and Means Social Security Subcommittee plans to hold a hearing Thursday to examine Social Security's solvency, and will focus on findings of the 2018 Annual Report of the Board of Trustees of the Federal Old-Age and Survivors Insurance and Federal Disability Insurance Trust Funds, which is due out this week.

This is the first time that's happened since the Reagan admin. However, certain long-term issues persist.

But Trump has declined to embrace a major restructuring of Social Security or Medicare, as some previous Republican presidents have.




"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", Treasury Secretary Steven Mnuchin said Tuesday.

The report did not change its insolvency date for Social Security, projecting it has enough funding until 2034. CMS is also increasing choice in Medicare Advantage, which will have new benefit choices in 2019. 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. Charles Schumer of NY, the Democratic leader.

In 1960, there were about five workers for every Social Security beneficiary. Medicare is widely seen as a more hard problem that goes beyond the growing number of baby boomers retiring. In our aging society, all of that will have to occur in the context of a growing ratio between retirees and the working-age population. And the number of people on Social Security is expected to climb to 91 million, from 62 million, in the same period.

Cubanski also said that Americans with higher incomes and more lucrative Social Security benefits will benefit from federal tax cuts that will lower paycheck deductions. That works out to about $31 a month.

Medicare costs will rise from last year's 3.7 percent of GDP to 5.8 percent by 2038.

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