Published: Fri, June 08, 2018
Medicine | By Debra Reynolds

Medicare to run out of money sooner than expected

Medicare to run out of money sooner than expected

But as Robert Pear of The New York Times notes, based on the new trustees' reports, "so far that does not appeared to have happened". The forecasts show no sign that a burst of economic growth will dramatically improve the finances of the government's largest entitlement programs.

Here's the problem. There are no such "trust funds".

The good news is, Social Security isn't projected to run short of funds any sooner than it was a year ago. The program provides health insurance to some 60 million people, most of whom are over 65 years old. After that, the government predicts it will be able to pay 91 percent of promised benefits.

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Social Security's Old-Age and Survivors Insurance Trust Fund, and Disability Insurance Trust Fund will be depleted in 2034, the same year projected in last year's report. Some 45 million retirees and six million dependents receive Social Security benefits. The average monthly payment is $1,294 for all beneficiaries. In simple economic terms, the government must balance the equation by either giving the programs more money (raising taxes) or cutting costs (reducing benefits), both moves that in his campaign candidate Trump said he would never do.

Basically, Social Security and Medicare are spending more than they will take in due to increased costs and the decline of workers paying into the system. The program's spending, meanwhile, was slightly higher than expected. Because of the deterioration in Medicare's finances, officials said the Trump administration will be required by law to send Congress a plan next year to address the problems, after the president's budget is submitted. 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. 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 fund pays hospital bills of medicare recipients. That is three years earlier than projected last year, Marketwatch noted.

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The trustees also expect Medicare spending "will increase in future years at a faster pace than either aggregate workers' earnings or the economy overall".

Medicare Part B premiums - which cover visits to physicians and other outpatient costs - should remain stable next year, the trustees said.

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