US healthcare almost broke, Medicare and Social Security's trust funds will have no money by this date
ETHealthWorld The Medicare hospital insurance trust fund is expected to deplete in 2033, three years earlier than last year's projection. Social Security's combined trust funds will run out by 2034, a year earlier than previously forecast.
The financial health of America's two most critical safety-net programs, Medicare and Social Security, is deteriorating faster than expected. An annual report released Wednesday, June 18, by program trustees shows that rising health care costs, demographic pressures, and a new law expanding Social Security benefits have accelerated the timeline for when the programs become out of money and cannot pay full benefits.
The Medicare hospital insurance trust fund is now expected to run out of money in 2033, three years earlier than projected just last year. Meanwhile, Social Security's combined trust funds, which support retirement and disability benefits, will be depleted by 2034, a year earlier than previously forecast.
At that point, beneficiaries would see a significant reduction in monthly payments unless Congress intervenes.The updated projections concern the long-term solvency of these programs, which tens of millions of Americans depend on for health care and income security.
The report highlights that Medicare's hospital insurance (Part A) trust fund faces a steeper decline due to higher-than-expected health care expenses in 2024. The fund posted a surplus of $29 billion last year, but deficits are expected to begin after 2027, leading to full depletion by 2033.Once exhausted, Medicare will only be able to cover 89% of inpatient care costs, such as hospital visits, hospice services, and post-hospital nursing care. Currently, about 68 million people are enrolled in Medicare, including Americans over age 65 and those with severe illnesses or disabilities.Social Security's combined trust funds, which support retirees and disability recipients, are projected to be depleted by 2034, one year earlier than last year's forecast of 2035. After that date, the program would only be able to pay 81% of scheduled benefits, if no changes are made.
This accelerated timeline results in part from the Social Security Fairness Act passed in January 2025. This law repealed the Windfall Elimination Provision and Government Pension Offset, increasing benefits for some workers. Trustees confirmed that this legislative change worsened the trust fund's depletion. Trustees of both programs urged lawmakers to act swiftly. 'Medicare still faces a substantial financial shortfall that needs to be addressed with further legislation,' the report said. Frank Bisignano, the newly appointed Social Security Commissioner, said that stabilizing the trust funds is a top priority for the Trump administration, which has so far pledged not to cut benefits.
Despite this, experts warn that without new revenue or cost controls, both programs risk serious disruption. Nancy Altman of Social Security Works argued that lawmakers must decide: raise revenue or cut benefits. 'There are two options for action,' she said. 'Any politician who doesn't support increasing Social Security's revenue is, by default, supporting benefit cuts.' AARP CEO Myechia Minter-Jordan added that with over 69 million Americans relying on Social Security, 'the stability of this vital program only becomes more important.'The Congressional Budget Office has repeatedly warned that an aging population is the main driver of rising debt related to Social Security and Medicare. The last major Social Security reform occurred about 40 years ago, when the eligibility age was raised from 65 to 67. Medicare eligibility remains at age 65.Several legislative proposals are currently being considered to address the trust funds' financial outlook. However, none have yet been passed.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Economic Times
4 hours ago
- Economic Times
US healthcare almost broke, Medicare and Social Security's trust funds will have no money by this date
ETHealthWorld The Medicare hospital insurance trust fund is expected to deplete in 2033, three years earlier than last year's projection. Social Security's combined trust funds will run out by 2034, a year earlier than previously forecast. The financial health of America's two most critical safety-net programs, Medicare and Social Security, is deteriorating faster than expected. An annual report released Wednesday, June 18, by program trustees shows that rising health care costs, demographic pressures, and a new law expanding Social Security benefits have accelerated the timeline for when the programs become out of money and cannot pay full benefits. The Medicare hospital insurance trust fund is now expected to run out of money in 2033, three years earlier than projected just last year. Meanwhile, Social Security's combined trust funds, which support retirement and disability benefits, will be depleted by 2034, a year earlier than previously forecast. At that point, beneficiaries would see a significant reduction in monthly payments unless Congress updated projections concern the long-term solvency of these programs, which tens of millions of Americans depend on for health care and income security. The report highlights that Medicare's hospital insurance (Part A) trust fund faces a steeper decline due to higher-than-expected health care expenses in 2024. The fund posted a surplus of $29 billion last year, but deficits are expected to begin after 2027, leading to full depletion by exhausted, Medicare will only be able to cover 89% of inpatient care costs, such as hospital visits, hospice services, and post-hospital nursing care. Currently, about 68 million people are enrolled in Medicare, including Americans over age 65 and those with severe illnesses or Security's combined trust funds, which support retirees and disability recipients, are projected to be depleted by 2034, one year earlier than last year's forecast of 2035. After that date, the program would only be able to pay 81% of scheduled benefits, if no changes are made. This accelerated timeline results in part from the Social Security Fairness Act passed in January 2025. This law repealed the Windfall Elimination Provision and Government Pension Offset, increasing benefits for some workers. Trustees confirmed that this legislative change worsened the trust fund's depletion. Trustees of both programs urged lawmakers to act swiftly. 'Medicare still faces a substantial financial shortfall that needs to be addressed with further legislation,' the report said. Frank Bisignano, the newly appointed Social Security Commissioner, said that stabilizing the trust funds is a top priority for the Trump administration, which has so far pledged not to cut benefits. Despite this, experts warn that without new revenue or cost controls, both programs risk serious disruption. Nancy Altman of Social Security Works argued that lawmakers must decide: raise revenue or cut benefits. 'There are two options for action,' she said. 'Any politician who doesn't support increasing Social Security's revenue is, by default, supporting benefit cuts.' AARP CEO Myechia Minter-Jordan added that with over 69 million Americans relying on Social Security, 'the stability of this vital program only becomes more important.'The Congressional Budget Office has repeatedly warned that an aging population is the main driver of rising debt related to Social Security and Medicare. The last major Social Security reform occurred about 40 years ago, when the eligibility age was raised from 65 to 67. Medicare eligibility remains at age legislative proposals are currently being considered to address the trust funds' financial outlook. However, none have yet been passed.
Hindustan Times
7 hours ago
- Hindustan Times
US to end LGBT suicide prevention service, says general hotline sufficient
WASHINGTON, - U.S. President Donald Trump's administration is ending funding for an LGBT suicide prevention hotline that it says encourages "radical gender ideology," a move that the project running the service called "devastating." The Trevor Project, a non-profit that provides free, specialized support to LGBT youth, said on Wednesday that its hotline would soon close as a result of the funding not being renewed. "I am devastated and heartbroken. The @TrevorProject received official notice that The Trump administration has ordered the closure of the national LGBTQ youth suicide lifeline in 30 days," Trevor Project CEO Jaymes Black said in a statement on Instagram. A spokesman for the White House Office of Management and Budget said funding would continue for 988 Lifeline, a wider suicide prevention hotline. "The president's Budget funds the 988 at $520 million – the same number as under Biden. It does not, however, grant taxpayer money to a chat service where children are encouraged to embrace radical gender ideology by 'counselors' without consent or knowledge of their parents," the spokesman added. Since taking office in January, Trump has signed multiple executive orders aimed at restricting transgender rights and dismantling diversity, equity and inclusion practices in the government and private sector. The Trump administration says such steps restore fairness, but civil rights and LGBT advocates say they leave marginalized groups more vulnerable. "The administration is eliminating a critical, life-saving resource that was part of this nation's public health infrastructure," said Black, adding that it seemed the country "has failed our LGBTQ young people." The hotline had serviced over 1.3 million young people since its inception in 2022, Black added.
Time of India
9 hours ago
- Time of India
US healthcare almost broke, Medicare and Social Security's trust funds will have no money by this date
The financial health of America's two most critical safety-net programs, Medicare and Social Security, is deteriorating faster than expected. An annual report released Wednesday, June 18, by program trustees shows that rising health care costs, demographic pressures, and a new law expanding Social Security benefits have accelerated the timeline for when the programs become out of money and cannot pay full benefits. The Medicare hospital insurance trust fund is now expected to run out of money in 2033, three years earlier than projected just last year. Meanwhile, Social Security's combined trust funds, which support retirement and disability benefits, will be depleted by 2034, a year earlier than previously forecast. At that point, beneficiaries would see a significant reduction in monthly payments unless Congress intervenes. The updated projections concern the long-term solvency of these programs, which tens of millions of Americans depend on for health care and income security. Medicare's Trust Fund to Be Exhausted by 2033 Live Events The report highlights that Medicare's hospital insurance (Part A) trust fund faces a steeper decline due to higher-than-expected health care expenses in 2024. The fund posted a surplus of $29 billion last year, but deficits are expected to begin after 2027, leading to full depletion by 2033. Once exhausted, Medicare will only be able to cover 89% of inpatient care costs, such as hospital visits, hospice services, and post-hospital nursing care. Currently, about 68 million people are enrolled in Medicare, including Americans over age 65 and those with severe illnesses or disabilities. Social Security Set to Pay Reduced Benefits by 2034 Social Security's combined trust funds, which support retirees and disability recipients, are projected to be depleted by 2034, one year earlier than last year's forecast of 2035. After that date, the program would only be able to pay 81% of scheduled benefits, if no changes are made. This accelerated timeline results in part from the Social Security Fairness Act passed in January 2025. This law repealed the Windfall Elimination Provision and Government Pension Offset, increasing benefits for some workers. Trustees confirmed that this legislative change worsened the trust fund's depletion. Urgency Builds for Legislative Action Trustees of both programs urged lawmakers to act swiftly. 'Medicare still faces a substantial financial shortfall that needs to be addressed with further legislation,' the report said. Frank Bisignano, the newly appointed Social Security Commissioner, said that stabilizing the trust funds is a top priority for the Trump administration, which has so far pledged not to cut benefits. Despite this, experts warn that without new revenue or cost controls, both programs risk serious disruption. Nancy Altman of Social Security Works argued that lawmakers must decide: raise revenue or cut benefits. 'There are two options for action,' she said. 'Any politician who doesn't support increasing Social Security's revenue is, by default, supporting benefit cuts.' AARP CEO Myechia Minter-Jordan added that with over 69 million Americans relying on Social Security, 'the stability of this vital program only becomes more important.' Demographics and Debt Add Pressure The Congressional Budget Office has repeatedly warned that an aging population is the main driver of rising debt related to Social Security and Medicare. The last major Social Security reform occurred about 40 years ago, when the eligibility age was raised from 65 to 67. Medicare eligibility remains at age 65. Several legislative proposals are currently being considered to address the trust funds' financial outlook. However, none have yet been passed.
