Medicare health care program fund to be exhausted by 2026

Medicare health care program fund to be exhausted by 2026

"Lawmakers have a broad continuum of policy options that would close or reduce Social Security's long-term financing shortfall", the report noted.

Medicare's financial problems worsened last year while Social Security still faces a significant long-term financial crunch - and will need to tap into its reserves for the first time in 36 years, according to annual reports released Tuesday by the programs' trustees.

The report says the other trust fund, which covers Medicare Parts B and D, is expected to be financed through the next 10 years and beyond.

That's because, according to the report, the government will collect less in income taxes, meaning less money will flow into the Medicare trust fund. In a 2006 blog post entitled "Sometimes, Governments Lie", the CATO Institute's Michael Cannon observed that both Social Security and Medicare have always been one big unfunded liability.

In 2017, Medicare covered 58.4 million people, with 49.5 million older than 65. Good advisors have been factoring uncertainty around Social Security into their clients' plans for many years now.

The Social Security trust funds for benefits for the elderly and disability insurance could be depleted by 2034, the same as last year's projection.


The program is now expected to deplete its funds by 2026, down from last year's estimate of 2029. By contrast, the government said a year ago that the trust fund would be exhausted in 2029.

Meanwhile, for the first time since 1982, costs for the Social Security retirement system will exceed revenues this year. Some 45 million retirees and six million dependents receive Social Security benefits.

Nancy Berryhill, the acting commissioner of the Social Security Administration, acknowledged that while the projected depletion date of the combined Social Security Trust Funds has not changed, "The fact remains that Congress can keep Social Security strong by taking action to ensure the future of the program".

Rather than cutting benefits, the Democratic-leaning Social Security Works coalition supports expanding benefits as a solution to the nation's looming retirement crisis by asking the wealthy to contribute more.

Why? Retirees, she said, "are experiencing cost increases in common household expenditures that are growing several times faster than 3%", a trend that has been consistent over the past 8 years, and will continue into 2019.

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