Trustees: Social Security and Medicare Headed for Insolvency in 13 and 6 Years
The Social Security and Medicare Trustees just released their 2022 reports on the financial status of the Social Security and Medicare programs. The Trustees show that the Social Security and Medicare Hospital Insurance (HI) trust funds are rapidly approaching insolvency and their funding imbalances need to be addressed sooner rather than later to prevent across-the-board benefit cuts or abrupt changes to tax or benefit levels.
The Social Security Trustees estimate the Social Security Old-Age and Survivors Insurance (OASI) trust fund will deplete its reserves by 2034 and the Social Security Disability Insurance (SSDI) trust fund will not become depleted within the 75-year projection window for the first time since the 1983 Trustees' report. On a theoretical combined basis, assuming revenue is allocated between the trust funds in the years between OASI and SSDI insolvency, Social Security will become insolvent by 2035. Upon insolvency, all beneficiaries will face a 20 percent across-the-board benefit cut, which will grow to 26 percent by 2096.
The Trustees estimate a 75-year actuarial shortfall of 3.42 percent of taxable payroll for Social Security, which is slightly lower than the 2021 report's estimate of 3.54 percent of payroll, but higher than any other year prior.
The Medicare Trustees estimate the Medicare HI trust fund will exhaust its reserves by 2028. Upon insolvency, HI spending will be cut by 10 percent, with those cuts growing to 20 percent by 2046. The Trustees estimate a 75-year actuarial shortfall of 0.70 percent of taxable payroll.
The Committee for a Responsible Federal Budget will publish our full analyses of both Trustees' reports later today and tomorrow, and will host an event (register here) on the state of the Social Security and Medicare trust funds on June 6.
Read our press release on the 2022 Social Security and Medicare Trustees reports here.