WASHINGTON (AP) — The go-broke dates for Medicare and Social Security have been pushed back as an improving economy has contributed to changed projected depletion dates, according to the annual Social Security and Medicare trustees report Monday.
Still, officials warn that policy changes are needed lest the programs become unable to pay full benefits to retiring Americans.
Medicare’s go-broke date for its hospital insurance trust fund was pushed back five years to 2036 in the latest report, thanks in part to higher payroll tax income and lower-than-projected expenses from last year.
Medicare is the federal government’s health insurance program that covers people age 65 and older and those with severe disabilities or illnesses. It covered more than 66 million people last year, with most being 65 and older.
Once the fund’s reserves become depleted, Medicare would be able to cover only 89% of costs for patients’ hospital visits, hospice care, and nursing home stays or home health care that follow hospital visits.
Meanwhile, Social Security’s trust funds — which cover old age and disability recipients — will be unable to pay full benefits beginning in 2035 instead of last year’s estimate of 2034. Social Security would only be able to pay 83% of benefits.
Social Security Administration Commissioner Martin O’Malley called the report “a measure of good news” but told The Associated Press that “Congress still needs to act in order to avoid what is now forecast to be, in the absence of their action, a 17% cut to people’s Social Security benefits.”
About 71 million people — including retirees, disabled people, and children — receive Social Security benefits.
President Joe Biden responded to the report by saying that “as long as I am president, I will keep strengthening Social Security and Medicare,” adding that he wants high-income taxpayers “to pay their fair share” to bolster funding for the benefit programs.
