“Both Social Security and Medicare face long-term financing shortfalls under currently scheduled benefits and financing,” the report’s summary reads. “Lawmakers have a broad continuum of policy options that would close or reduce the long-term financing shortfall of both programs.”
The policy options available to lawmakers in both houses of the United States Congress would be better served by acting quickly, the summary recommends, in order to mitigate the potential affects the financial shortfalls can have on payouts to the programs’ beneficiaries.
“The Trustees recommend that lawmakers take action sooner rather than later to address these shortfalls, so that a broader range of solutions can be considered and more time will be available to phase in changes while giving the public adequate time to prepare,” the summary says.
The listed Trustees in the report include Treasury Secretary Steven Mnuchin, Labor Secretary Alexander Acosta, Secretary of Health and Human Services Alex Azar and Acting Social Security Commissioner Nancy Berryhill.
The cost of Social Security will reportedly exceed its income in 2020, according to the report. At that point, it will be the first time it has done so since 1982. While the program does have a reserve fund, its own forecast is also grim and comes with a projected depletion by 2036. If that takes place as predicted, program beneficiaries will receive smaller payments than they are scheduled to if Congress takes no corrective action.
Additionally, the hospital insurance fund for the Medicare program is expected to deplete in 2026, which aligns with the same date that was projected in the same report in 2018. If that takes place as predicted, nursing homes, hospitals and doctors would not receive full compensation from the program, which could lead to patients shouldering a greater share of the financial shortfall in order to make up for it.
Read the full 2019 Annual Report of the Board of Trustees of the Federal Old-Age and Survivors Insurance and Federal Disability Insurance Trust Funds at the Social Security Administration.