Trustees report warns Medicare finances worsening - 6/6/2018 12:55:22 AM

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Trustees report warns Medicare finances worsening - 6/6/2018 12:55:22 AM

According to the annual Social Security Board of Trustees report, the year when the combined trust fund reserves are projected to become depleted (if Congress does not act before then, they optimistically remind us), is 2034 - the same as projected last year.

The trust fund for Medicare is set to become insolvent in 2026 - three years earlier than last year's official projection.

Some 58.4 million Americans depend on Medicare while 62 million receive Social Security benefits (of whom 45 million are retirees, six million are dependents and another 10 million are disabled), according to the government.

President Donald Trump campaigned on a promise that he wouldn't cut Social Security or Medicare, but he hasn't offered a rescue plan for either program.

Officials conceded Tuesday at a news conference at the US Treasury that the tax cuts had reduced revenues for Medicare and Social Security. However, certain long-term issues persist.

Government trustees reported that a combination of rising costs and an aging population cut the life expectancy of Medicare's trust fund to just 8 years.

The trustees estimate that by 2034 the combined trust funds for Social Security - which help fund the old age and disability programs - will run dry.

Despite looming shortfalls, U.S. Treasury Secretary Steven Mnuchin said accelerated economic growth under the current administration would help to bolster both programs' coffers in the coming years.

Social Security recipients are likely to see a cost of living increase of about 2.4 percent next year, working out to roughly $31 a month, government experts said. Charles Schumer of NY, the Democratic leader. Republicans say the programs must be revamped to ensure they will be solvent for baby boomers and their children.

A major reason for Social Security's long-term financial problems is a decline in the number of workers for each beneficiary.

Medicare's problems are widely seen as more hard to solve. General revenues will finance roughly three-quarters of SMI costs, and premiums paid by beneficiaries nearly all of the remaining quarter. It has added 7 million people since 2013.

Both the cost-of-living increase and the Medicare outpatient premium are not officially determined until later in the year, and the initial projections can change.

Medicare spending as a percentage of gross domestic product totaled 3.7 percent in 2017, and the trustees project it will increase to at least 6.2 percent by 2092.

Information for this article was contributed by Robert Pear of The New York Times, and by Ricardo Alonso-Zaldivar and Andrew Taylor of The Associated Press.

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