Medicare to run out of money sooner than expected

Modesto Morganelli
Giugno 10, 2018

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 program trustees say it will become insolvent in 2026, which is three years earlier than previously forecasted.

Both numbers are expected to rise as the population ages making the financial health of both programs integral to Washington's future health as well. That's also the bad news.

The end of that individual mandate is expected to lead to higher rates of uninsured patients and uncompensated care costs for hospitals, which Medicare helps fund, government officials said during a press briefing at the Treasury Department Tuesday afternoon.

Both programs are funded by dedicated taxes that no longer generate sufficient revenue to cover either program's costs. Medicare recipients' monthly premiums change annually based on these costs.

Medicare covered more than 58 million Americans in 2017.

Before the Affordable Care Act was passed, the trustees had projected the Part A trust fund would run dry this year.

The country's main welfare program for retirees, Social Security, also faces an uncertain future.

The projections are the first from the administration since Trump signed a $1.5 trillion tax cut into law in December. The four top officials serve as the Social Security and Medicare trustees, along with two independent trustees who are supposed to represent the public.

"President Trump's recently unveiled prescription drug pricing proposals were a missed opportunity to bring Big Pharma to the negotiating table with the Medicare program", the committee's CEO, Max Richtman, said in a statement.

The report said lower payroll taxes are being paid as a result of lower wages and reduced income from taxation of Social Security benefits.

Trustees said the trust fund for hospital expenses is not sufficiently financed over the next decade.

Social Security covers 62 million people, split among retired workers and their dependents, survivors of workers who've died and disabled people.

The report said the total annual cost of Social Security is projected to exceed total annual income in 2018 for the first time since Ronald Reagan's presidency, meaning the program will have to tap into reserves.

"The programs remain secure", Treasury Secretary Steven Mnuchin said in a statement. Mnuchin added that "long-term issues persist".

In another projection, the trustees estimate the hypothetical combined Social Security trust funds will be depleted in 2034 - no change from a year ago.

Altre relazioniGrafFiotech

Discuti questo articolo

Segui i nostri GIORNALE