Medicare insolvent in 2026, Social Security by 2034

Medicare insolvent in 2026, Social Security by 2034

Ronald Pratt
June 8, 2018

Meanwhile, higher benefit payouts mean Social Security will have to dip into its almost $3 trillion trust fund for the first time since 1982 - and trustees warned the program would be insolvent by 2034.

The projected depletion date for the Old-Age and Survivors Trust Fund was moved up to late 2034 from last year's estimate of early 2035, and after depletion is projected to pay 77% of benefits. Social Security's cost has exceeded its non-interest income since 2010.

Those living off of Social Security will not likely be "dancing in the streets" with the anticipated 3% COLA, Johnson said, despite the fact that over the past nine years the COLAs have averaged just 1.2%.

Together, the two programs have been credited with dramatically reducing poverty among older people and extending life expectancy for Americans.

Social Security and Medicare will experience cost growth substantially in excess of GDP growth through the mid-2030s due to rapid aging of the Baby Boomer generation, and lower-birth-rate generations entering employment.

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But demands on both programs are increasing as America ages. As for Social Security, proposed reform includes slowing the program's growth by determining benefits based on prices rather than wages and making significant cuts to the Social Security Disability Insurance and Supplemental Security Income program, which is plagued with fraud. CMS is also increasing choice in Medicare Advantage, which will have new benefit choices in 2019.

Medicare's problems are widely seen as more hard to solve. The public trustee posts are now unfilled. At that point Social Security will be able to pay only 79% in promised benefits to retirees and disabled beneficiaries.

Democrats, meanwhile, want to extend the social safety net by spending more on health care and education. That's what he would say, given that fiscally irresponsible Republican policies, those ballyhooed tax cuts included, will add $1.6 trillion to the federal deficit over the next 10 years, according to the Congressional Budget Office. Government economic experts who briefed reporters Tuesday said the tax bill and other recent legislative changes from Congress on balance worsened the condition of both programs. The White House said the cuts would offset the initial drop in government revenue by spurring greater economic growth.

House Speaker Paul Ryan, R-Wis., has always been an advocate for overhauling the programs, introducing a voucher-like system for Medicare and calling for partially privatizing Social Security.