Top 5 Things To Know | Medicare And Social Security Trustees Reports Released
On Monday, the annual trustees reports for Social Security and Medicare were released. The reports are intended to provide an update on the current state of the Social Security trust fund and the Medicare hospital-insurance program. Today’s Top 5 Things To Know will take a closer look at those reports.
- Medicare’s Hospital Insurance Trust Fund Will Be Depleted By 2030. The Monday trustees report showed that due to a slowdown in Medicare spending over the past few years, the outlook for the Medicare trust fund has improved. According to Reuters, “ The program’s Hospital Insurance trust fund – which finances Medicare Part A – is projected to run dry in 2030, four years later than last year’s forecast and 13 years later than forecast before passage of the Affordable Care Act (ACA).”
- However, By 2030 The Fund Will Only Be Able To Cover 85 Percent Of Beneficiaries. According to the trustees report, “The percentage of projected expenditures covered by tax revenues is assumed to decrease from 85 percent in 2030 to 75 percent in 2045 and to stabilize at about this level thereafter.” In addition, the New York Times noted “Medicare spending per beneficiary is expected to grow about 40 percent over the next decade, to $17,360 in 2023, with faster growth for prescription drugs and doctors’ services.”
- Little Changed With Social Security Outlook. This years trustees report projected that the Social Security trust fund will be depleted by 2033, the same as expected last year. An administration official noted, “Social Security provides benefits to 59 million people, and, on average, about 10,000 baby boomers become eligible each day. Payroll taxes and other revenue dedicated to Social Security would be sufficient to pay about three-fourths of promised benefits if its trust fund runs out.”
- By Late 2016, The Social Security Disability Insurance Program Will Only Be Able To Pay 81 Percent Of Scheduled Benefits. According to the trustees report, “Payment of full DI benefits beyond 2016, when tax income would cover only 81 percent of scheduled benefits, will require legislation to address the financial imbalance.” The Wall Street Journal reported, “Roughly 11 million Americans collected a total of $140 billion in Social Security disability benefits last year, up from 7.9 million people collecting $78.2 billion in 2004.”
- In Order To Better Mitigate The DI Depletion, The Trustees Suggested Allocating More Of The Social Security Payroll Tax To Disability. According to the Los Angeles Times, “The trustees suggest that Congress do the same thing to shore up disability that it did at the time of the last such crisis, in 1995: simply allocate more of the Social Security payroll tax from the old-age program to disability.The payroll tax is currently 12.4% of wages (up to a maximum annual wage this year of $117,000. If the disability allocation rose from 0.9 of a percentage point to 1.4 points over the next couple of years and then drifted back down, the disability fund would remain solvent through 2033; the old age fund’s exhaustion date would shift only slightly, from 2034 to 2033. That would give Congress the better part of a couple of decades to work out a longer term fix.”