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2036 and 2035 Reserves Extended: U.S. Treasury Reports Stronger Social Security and Medicare Funds – 89% and 83% Benefits Coverage!

(PHOTO: Politico)

Social Security and Medicare Funds Strengthened

Extended Lifespan Projected, Biden Administration Proposes Tax Increase

There’s good news for seniors in the United States! The reserves supporting Social Security and Medicare benefits have received a boost from the robust economy, according to reports released by the U.S. Treasury. The Medicare Hospital Insurance Trust Fund which provides healthcare for seniors and some disabled individuals is now expected to last until 2036 five years longer than previously estimated. Even after that it will still be able to cover 89% of scheduled benefits. Similarly the combined Social Security trust funds are now projected to run out in 2035 one year later than previously thought providing 83% of scheduled pension and disability benefits, according to the finance report of Fast Company.

While this extension offers a temporary reprieve the long-term challenges remain. With the baby boomer generation retiring Congress must find solutions to ensure the programs’ sustainability. The Biden administration has proposed raising payroll taxes on higher earners rejecting benefit cuts. The Peter G Peterson Foundation suggests options like raising the retirement age and increasing tax collections. Currently only income up to $168,600 is subject to Social Security payroll tax. The recent strong economic growth surpassing expectations has driven up tax revenues and productivity delaying the depletion of reserves. The main Social Security Trust Fund could see its depletion date pushed back by seven months to November 2033.

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2036 and 2035 Reserves Extended: U.S. Treasury Reports Stronger Social Security and Medicare Funds – 89% and 83% Benefits Coverage! (PHOTO: Fast Company)

Extended Solvency and Healthcare Cost Reductions Highlight U.S. Treasury Reports

Furthermore, the Social Security Disability Trust Fund is now projected to remain solvent until at least 2098, a significant improvement from the previous estimate of depletion by 2057. The Medicare Hospital Insurance Trust Fund is also benefiting from reduced healthcare costs and policy changes including excluding reimbursement of medical education costs for Medicare Advantage enrollees. This trend began during the COVID-19 pandemic with fewer severe health problems among the senior population due to premature deaths of individuals with significant health issues. In 2023 the Medicare fund saw a surplus of $12.2 billion projected to continue until 2029 before deficits begin depleting reserves by 2036. Overall while these reports offer some relief they underscore the need for long-term solutions to ensure the sustainability of Social Security and Medicare benefits for future generations.

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