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 Fact Sheet: Social Security And Medicare Trustees Report


7/13/2017

WASHINGTON - Today the Social Security and Medicare Boards of Trustees issued their annual financial review of the programs.

The projections indicate that income is sufficient to pay full scheduled benefits until 2028 for Social Security's Disability Insurance program, until 2029 for Medicare's Hospital Insurance program, and until 2035 for Social Security's Old Age and Survivors Insurance program.  The Supplementary Medical Insurance (SMI) Trust Fund remains adequately financed throughout the projection period, but only because SMI is financed, in part, by general revenues. 

The Trustees project that Medicare costs will grow from approximately 3.6 percent of GDP in 2016 to 5.6 percent of GDP by 2041,  and will increase gradually thereafter to about 5.9 percent of GDP by 2091. The costs of the Social Security program equaled 5 percent of GDP in 2016 and are expected to rise to 6.1 percent of GDP by 2037, decline to 5.9 percent of GDP by 2050, and then rise slowly to 6.1 percent of GDP by 2091. 

Social Security

The Social Security program consists of the Old-Age and Survivors Insurance (OASI) Trust Fund and the Disability Insurance (DI) Trust Fund.  The Trustees project that the hypothetical combined Trust Funds will be depleted in 2034.  The 75-year actuarial deficit for the combined trust funds is estimated at 2.83 percent of taxable payroll, up from 2.66 percent of taxable payroll estimated in last year's Report.  This reflects a 0.05 percentage point worsening due to extending the projection period and valuation date one year, and a 0.12 percentage point worsening due to new data and improved projection methods. 

While the projections for the combined Trust Funds are less favorable than last year, the near-term projections for the DI Trust Fund are more favorable.   It is now projected that the DI will have sufficient funds to pay full scheduled benefits until 2028, five later than projected last year due to lower-than-expected recent applications for and awards of DI benefits. 

Social Security's total income from taxes and interest is projected to exceed its total costs through 2021; however, cost is projected to exceed non-interest income throughout the projection period. This deficit will average approximately $51 billion between 2017 and 2020.

Medicare

Medicare has two Trust Funds: the Hospital Insurance (HI) Trust Fund and the Supplementary Medical Insurance (SMI) Trust Fund.  The Trustees project that the HI Trust Fund will be able to pay full scheduled benefits until 2029, a year later than projected in last year's report.   After trust fund depletion in 2029, the share of scheduled benefits that can be paid from dedicated revenues is 88 percent for the remainder of 2029, declines slowly to 81 percent in 2041, and then rises gradually to 88 percent in 2091.

The 75-year actuarial deficit in the HI Trust Fund is projected at 0.64 percent of taxable payroll, down from 0.73 percent projected in last year's report. This improvement reflects a 0.01 percentage point worsening due to extending the projection period and valuation date one year, and a 0.10 percentage point improvement due to new data and changed assumptions. 

The SMI Trust Fund, which includes Medicare Part B and Medicare Part D, remains adequately financed into the future due to financing being derived from general revenues and beneficiary premiums.  The aging population and rising health care costs have driven the costs of the programs to rise steadily from 2.1 percent of GDP in 2016 to approximately 3.4 percent of GDP in 2037. Three quarters of these costs will be financed from general revenues, while the remaining will be financed from premiums paid by beneficiaries.

After the Reports are transmitted to Congress, the Social Security report will be posted at https://www.ssa.gov/OACT/TR/2017/index.html and the Medicare report will be posted at https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/ReportsTrustFunds/

   
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