Medicare fund to fall short in 2026, sooner than last forecast

Social Security now running a deficit; Medicare to hit insolvency three years earlier than projected

At this rate, the combined asset reserves of Social Security's twin retirement and disability trust funds would become depleted by 2034, the same as projected previous year, with 79% of the benefits payable at that time, according to the report.

The trustees forecast that 100% of benefits will be covered through 2034, after which the trust funds for Social Security, which also cover old age and disability insurance programs, will only be able to cover about 79% of benefits.

For Social Security, the last time the program ran an annual deficit was in 1982, before President Reagan signed changes that set it on firmer footing for the next 30 years.

"However, certain long-term issues persist", the statement added.

The trustees also noted that the gap between Social Security's costs and revenues over the next 75 years is equal to $12.5 trillion, up from $11.4 trillion in 2016.

At the end of 2017, the OASDI program was providing benefit payments to about 62 million people: 45 million retired workers and dependents of retired workers, 6 million survivors of deceased workers, and 10 million disabled workers and dependents of disabled workers. Social Security and Medicare probably will never run out of money, in the sense that no Congress or president would let benefit checks be cut.

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Of the two programs, Medicare faces the greatest fiscal challenges as medical costs increase and the U.S. ages, with many baby boomers set to retire in the next several years.

The Cabinet secretaries for Treasury, Health and Human Services, and Labor usually participate in the annual release of the report on Social Security and Medicare, along with the Social Security commissioner, and take questions from reporters.

"This report should eliminate any doubt that Trump's tax law yanked Medicare closer to insolvency", Senator Ron Wyden of OR, the top Democrat on the Finance Committee, said in a statement. Republicans say the programs must be revamped to ensure they will be solvent for baby boomers and their children.

In 1960, there were about five workers for every Social Security beneficiary.

The aging of the population is another factor in the growth of the two entitlement programs. Social Security's cost has exceeded its non-interest income since 2010. About a quarter of Part B costs are paid for by beneficiary premiums with the rest from the federal budget.

Medicare costs will rise from last year's 3.7 percent of GDP to 5.8 percent by 2038.

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