Medicare’s trust fund for inpatient care will be exhausted in 2028, two years earlier than previously projected. And some beneficiaries could face higher monthly premiums next year. Wednesday’s report said it is now forecasting an increase of just 0.2% in living-cost adjustments at year-end.
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In a new report, the various trust funds financing the two programs continue to forecast long-term budget problems due to an aging population. It was facing depletion this year, but Congress last fall approved funding changes that temporarily restored solvency.
More than 49 million Americans collected Social Security retirement benefits past year, with 10.8 million receiving disability benefits. Beneficiaries got no increase this year.
The U.S. government spent $648 billion on Medicare in 2015, representing 3.6% of the nation’s gross domestic product, according to the report. “Now is the time for people to engage in the important national conversation about how to keep Social Security strong”.
Four serve by virtue of their positions with the federal government: Jacob J. Lew, Secretary of the Treasury and Managing Trustee; Carolyn W. Colvin, Acting Commissioner of Social Security; Sylvia M. Burwell, Secretary of Health and Human Services; and Thomas E. Perez, Secretary of Labor. Clinton has proposed expanding Social Security benefits for widows and family caregivers, as well as making upper-income earners pay more to support the program.
But the trustees said Wednesday that the short-term financial outlook for Medicare has worsened in the past year because of changes in their assumptions and expectations. (Note that the regulations can be complex, and you may benefit from seeking professional advice.) For individuals in poor health or with little or no other financial resources, early Social Security claiming may be appropriate, but for most retirees, the increase in guaranteed income gained by deferring Social Security makes waiting to start benefits an appropriate strategy. Given that at age 65, more than 50% of women can expect to live past age 88 (and 50% of men past 85), delaying Social Security can provide powerful longevity protection.
The trustees report did not hold positive news for high-income retirees who could see a 22% increase in their monthly premiums for Medicare Part B, which covers doctor visits and other outpatient care. The number of Social Security beneficiaries is expected to reach 76 million by 2025.
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One surprising thing about the report was that its results did not trigger the use of the Affordable Care Act’s Independent Payment Advisory Board [IPAB], which is supposed to spring into action once the trust fund hits a set threshold. But Donald Trump, the likely GOP nominee, has emphatically spurned calls to extend retirement ages or reduce benefit payments for wealthier Americans. Those cuts are then sent to the president and Congress for fast-track consideration.
