As a contrast to the improved outlook of Social Security’s retirement and disability Trust Funds, the future of the Medicare Trust Fund is not so optimistic.
Medicare’s Hospital Insurance Trust Fund deteriorated last year and the Medicare Trust Fund will be depleted by 2026 according to officials from the Trump administration. Last year the government said the Medicare Trust Fund would not be depleted until 2029.
The Trump administration has focused on improving the economy to improve the solvency of Social Security and Medicare, which so far has not improved the outlook of Medicare. According to a story in the New York Times, the report on the Medicare Trust Fund said the less favorable outlook for Medicare’s hospital trust fund resulted from “adverse changes” in program income and costs. Specifically, income to the Medicare Trust Fund is expected to be lower than previously estimated because of “lower payroll taxes attributable to lowered wages in 2017 and lower levels of projected gross domestic product,” according to the Treasury Department.
One reason the Medicare Trust Fund is not doing so well is the fact that healthcare costs continue to increase. “The current trajectories in health spending are both unsustainable and unmatched by increases in quality,” said Alex Azar II, the secretary of Health and Human Services. This will result in higher costs for Medicare beneficiaries who will pay an extra $1.50 per month for the program next year.
The fight over Social Security and Medicare is expected to continue for the country’s two major political parties. Leading Republicans have been in favor of reducing entitlement benefits to save the programs, but Democratic leaders have stood firm and even want to find ways to increase benefits. The Democratic Party platform says, “we will fight every effort to cut, privatize or weaken Social Security, including attempts to raise the retirement age, diminish benefits by cutting cost-of-living adjustments or reducing earned benefits.”
