Tags: Medicare | Money | white house | warns | social security | trust fund

WH Warns Medicare Trust Fund Will Run Out of Money

Image: WH Warns Medicare Trust Fund Will Run Out of Money
Treasury Secretary Jack Lew (Getty Images)

By    |   Wednesday, 22 Jun 2016 12:15 PM

The Obama administration is warning that Medicare's main trust fund will run dry by 2028 — two years earlier than had been previously estimated — and the Social Security trust fund will follow suit by 2034.

Both programs made up about 40 percent of federal spending in 2015, The Hill reports.

"Medicare faces a substantial, long-term shortfall that needs to be addressed," Treasury Secretary Jack Lew said Wednesday.

"Social Security and Medicare remain secure in the medium-term," he added. "But reform will be needed, and Congress should not wait until the eleventh hour to address the fiscal challenges given that they represent the cornerstone of economic security for seniors in our country."

According to the Hill, the grim annual report card from the trustees of both programs comes despite federal steps to cut healthcare costs — including payment reforms in Obamacare — but that the long-term effects of reforms won't cover big increases in people enrolling in Medicare and the rising costs of their care.

And over the long-term, the administration warns the "availability and quality" of healthcare under Medicare could become less than those insured by private health plans.

More than 49 million Americans collected Social Security retirement benefits last year, 10.8 million received disability benefits and 55.3 million were covered under Medicare, The Wall Street Journal reports.

The Journal reports Medicare's trust fund is projected to face depletion earlier than was forecast last year because of changes in projected incomes and costs. As recently as 2009, trustees had estimated that the hospital-care fund would be depleted by 2017, but projections have improved over the past decade due to a slowdown in health-care inflation.

The new report projects costs will begin to rise to around 5.4 percent a year over the next five years, from a 2.4 percent annual growth rate over the previous five years.

It also estimates that, at the current rate of inflation, Social Security beneficiaries will see an increase of just 0.2 percent in the cost-of-living adjustment at year-end, the Journal reports.

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The Obama administration is warning that Medicare's main trust fund will run dry by 2028 — two years earlier than had been previously estimated — and the Social Security trust fund will follow suit by 2034.
white house, warns, social security, trust fund
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2016-15-22
Wednesday, 22 Jun 2016 12:15 PM
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