Tuesday, June 12, 2018
The Medicare Trustees have released their 2018 annual report, which is chock-full of empirical data. Reporting on this, the New York Times puts things in perspective with their story:Medicare’s Trust Fund Is Set to Run Out in 8 Years. Social Security, 16. This is less time than was reported last year, as the story explains:
The Medicare trust fund will be depleted in 2026, the administration said. By contrast, the government said last year that the trust fund would be exhausted in 2029.
In a companion report, federal officials said the Social Security Trust Funds for old-age benefits and disability insurance, taken together, could be depleted in 2034, the same year projected in last year’s report. The fund that helps tens of millions of retirees is expected to be depleted a year earlier than projected last year, while the outlook for the disability trust fund is more favorable.
A good economy doesn't seem to be enough to extend the programs' solvency, according to the article:
The report said the less favorable outlook for Medicare’s hospital trust fund resulted from “adverse changes” in program income and costs. Income to the Medicare fund is expected to be lower than estimated last year because of “lower payroll taxes attributable to lowered wages in 2017 and lower levels of projected gross domestic product,” the Treasury said in a “fact sheet” accompanying the report.
At the same time, it said, outlays from Medicare’s hospital trust fund “are expected to be higher than last year’s estimates due to higher-than-anticipated spending in 2017, legislation that increases hospital spending” and higher payments to private Medicare Advantage plans.
The Trustees report explains why the trust fund's time line has sped up:
The estimated depletion date for the HI trust fund is 2026, 3 years earlier than in last year’s report. As in past years, the Trustees have determined that the fund is not adequately financed over the next 10 years HI income is projected to be lower than last year’s estimates due to (i) lower payroll taxes attributable to lowered wages for 2017 and lower levels of projected GDP and (ii) lower income from the taxation of Social Security benefits as a result of legislation. HI expenditures are projected to be slightly high er than last year’s estimates, mostly due to higher than expected spending in 2017, legislation that increased hospital spending, and higher Medicare Advantage payments .
The full Trustees' report is available here.