Social Security and Medicare Trustees Release 2024 Reports
The Social Security and Medicare Trustees just released their annual reports on the financial status of the Social Security and Medicare programs. The Trustees project that both the Social Security and Medicare trust funds are within 12 years of insolvency and in need of trust fund solutions. Specifically, they project the Social Security Old Age and Survivors Insurance (OASI) trust fund will run out of reserves in 2033, the Medicare Hospital Insurance (HI) trust fund will become insolvent by 2036, and the Social Security Disability Insurance (SSDI) trust fund will remain solvent over the 75-year projection window. Assuming revenue is reallocated in the years between OASI and SSDI insolvency, the theoretically combined Social Security trust funds will be insolvent by 2035.
In other words, Social Security's retirement trust fund will reach insolvency when today’s 58-year-olds reach the normal retirement age and today’s youngest retirees turn 71. At that point, all beneficiaries will face a 21 percent across-the-board benefit cut. On theoretically combined basis, all beneficiaries will face a 17 percent cut in 2035. Over the full 75-year projection window, Social Security's combined funds faces an actuarial imbalance of 3.50 percent of taxable payroll, which is the equivalent of 1.2 percent of Gross Domestic Product (GDP) or 20 percent of all future benefits.
The Medicare Trustees estimate that the Medicare HI trust fund will exhaust its reserves by 2036, when today's 53-year-olds are eligible for the program and today's youngest beneficiaries turn 77. Upon insolvency, HI spending will be cut by 11 percent, and that cut will continue to grow to 13 percent by 2048. This cut is likely to lead to lead to disruptions in the health services and access to care.
The Medicare Trustees estimate a 75-year actuarial shortfall of 0.35 percent of taxable payroll. Under the Medicare Chief Actuary's illustrative alternative scenario, the HI shortfall would be 1.17 percent of payroll.
The Committee for a Responsible Federal Budget will publish our full analyses of the Social Security and Medicare Trustees reports later today.
