WASHINGTON–(ENEWSPF)–May 31, 2013. Today the Social Security and Medicare Boards of Trustees issued their annual financial review of the programs. Social Security’s retirement and disability programs have dedicated resources sufficient to cover benefits for the next 20 years, until 2033. After 2033, it is expected that the income from the dedicated payroll tax will be sufficient to finance about three quarters of scheduled benefits through 2087.
The Medicare Hospital Insurance Trust Fund will have sufficient funds to cover its obligations until 2026, two years later than was projected last year, and nine years later than was projected in the last Report issued prior to passage of the Affordable Care Act.
Social Security
Taken in combination, the Old Age, Survivor’s and Disability Insurance (OASDI) Trust Funds are projected to be exhausted in 2033, at which point annual revenues from the dedicated payroll tax will be sufficient to fund three quarters of scheduled benefits through 2087. Taken independently, the Old Age and Survivor’s Insurance (OASI) trust fund is projected to reach exhaustion in 2035, and the Disability Insurance trust fund is expected to reach exhaustion in 2016. Beyond these dates, dedicated payroll tax from each trust fund will be sufficient to pay more than three quarters of scheduled retirement benefits and 80 percent of scheduled disability benefits across the 75-year window.
While legislation is needed to address all of Social Security’s financial imbalances, the need has become most urgent with respect to the program’s disability insurance component.
Medicare
The Medicare Hospital Insurance (HI) Trust Fund will have sufficient funds to cover its obligations until 2026, two years later than was projected last year, and nine years later than was projected in the last report issued prior to passage of the Affordable Care Act.
After 2026, the share of HI costs that could be financed with dedicated payroll tax revenues would decline slowly from 87 percent in 2033 to about 70 percent in 2050 and later.
Part B of Supplementary Medical Insurance (SMI), which pays doctors’ bills and other outpatient expenses, and Part D, which provides access to prescription drug coverage, are both projected to remain adequately financed into the indefinite future because current law automatically provides financing each year to meet the next year’s expected costs. However, the aging population and rising health care costs cause SMI projected costs to grow steadily from 2.0 percent of GDP in 2012 to approximately 3.3 percent of GDP in 2035, and then more slowly to 4.0 percent of GDP by 2087. Roughly three-quarters of these costs will be financed from general revenues and about one-quarter from premiums paid by beneficiaries.
Source: treasury.gov
