Medicare, the U.S. health insurance program for the elderly and disabled, won’t have sufficient money to pay full benefits starting in 2024, five years earlier than last year’s estimate.
Social Security, the federal program that provides income to retirees, will run out of funds for paying full benefits in 2036, one year sooner than projected last year, the U.S. government said today in an annual report on the program.
Both projections have been affected by a slower-than- anticipated economic recovery, according to the report. The estimates for funding add urgency to negotiations between Democrats and Republicans on ways to cut spending to reduce the U.S. budget deficit.
“Projected long-run program costs for both Medicare and Social Security are sustainable under currently scheduled financing, and will require legislative corrections if disruptive consequences for beneficiaries and taxpayers are to be avoided,” according to the report summary.
The 2010 health-care overhaul backed by Democrats extended the life of Medicare, though more must be done to shore up the program’s long-term funding, Treasury Secretary Timothy Geithner said in a statement distributed with the report.
“If action is taken sooner rather than later, more options and more time will be available to phase in changes so that those affected can adequately prepare,” he said in the statement. “If we do not do more to contain health-care costs, our commitments will become unsustainable.”
Republicans demanding that the U.S. cut its budget deficit have proposed privatizing Medicare by giving individuals a subsidy to buy coverage from private insurers.
© Copyright 2017 Bloomberg News. All rights reserved.