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tiptrot.com June 24, 2018


Medicare Funding To Run Out 3 Years Earlier

08 June 2018, 04:42 | Nichole Osborne

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

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

If that doesn't sound dire enough, in their annual report, the Social Security trustees said that Medicare's hospital insurance fund will be depleted in 2026, reserves for the fund that pays disability benefits would be emptied in 2032, and all Social Security reserves would be exhausted by 2034.

The trustees also found Medicare's hospital insurance fund is on pace to run out in 2026.

"This report should eliminate any doubt that Trump's tax law yanked Medicare closer to insolvency", Senator Ron Wyden of OR, the top Democrat on the Finance Committee, said in a statement.

Medicare Part A's trust fund is funded through payroll taxes, split between employer and employee.


"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 and lead them to a more stable path".

Cubanski said that the Trump administration's effort to repeal the Affordable Care Act's mandate that requires almost everyone be insured is one factor that will lead to higher Medicare hospital fund spending.

Treasury Secretary Steven Mnuchin said in a statement that there's time to fix the problems. "The programs remain secure", Mnuchin said in response to the report. Medicare "is on track to meet its obligations to beneficiaries well into the next decade". Social Security and Medicare probably will never run out of money, in the sense that no Congress or president would let benefit checks be cut. Last year's Republican tax cuts also reduced projected revenue from taxes on Social Security benefits. "Now is the time Congress should prepare for the future, not by threatening workers' benefits, but by expanding Social Security". It will decline further to about 2.2 by 2035, when most baby boomers will have retired, officials said. 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 our aging society, all of that will have to occur in the context of a growing ratio between retirees and the working-age population. The number of Medicare beneficiaries is expected to surge to 89 million in 2040 from 60 million today, according to Medicare actuaries. Social Security's cost has exceeded its non-interest income since 2010.

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.



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