Medicare’s finances were downgraded in a new report from the program’s trustees.
Medicare’s hospital insurance fund will be depleted in 2026, said the trustees who oversee the benefit program in an annual report.
That is three years earlier than projected last year.
Medicare beneficiaries wouldn’t face an immediate cut after the trust fund is depleted in 2026.
The trustees said the share of benefits that can be paid from revenues will decline to 78% in 2039.
That share rises again to 85% in 2092.
The hospital fund is financed mainly through payroll taxes.
The trustees said Medicare’s changed outlook is due to adverse changes in the program’s income and costs.
Hospital insurance fund income is projected to be lower than last year’s estimates
thanks to “lower payroll taxes attributable to lowered wages in 2017 and lower levels of projected GDP,” the trustees said.
And hospital insurance fund expenditures are expected to be higher than last year’s estimates, the trustees said.
Treasury Secretary Steven Mnuchin said in a statement that “lackluster economic growth in previous years,” as well as an aging population, has contributed to shortages for both Social Security and Medicare.
He said the Trump administration’s economic agenda, including tax cuts and trade deals, would generate growth and help to secure the programs.
Yea and I believe in unicorns.
AARP said in a statement that the report showed “challenges ahead for the long term,” and singled out health care for action during the election year.