The trust fund that pays Medicare’s hospital expenses will run out of money in 2029, a year later than the most recent projection, according to a federal report. The Social Security program will remain solvent until 2034, a projection unchanged from last year.
The annual report from the Social Security and Medicare board of trustees provides a snapshot of the long-term solvency of the federal government’s two biggest entitlement programs. It comes as Republican lawmakers have introduced a new version of a health care bill that would make deep, long-term cuts to a different entitlement program, Medicaid.
Together, Medicare and Social Security comprised 42 percent of federal program spending in 2016. Medicare covered 56.8 million beneficiaries in 2016 and Social Security provided benefits for 60.9 million people.
The trustees include representatives of the Treasury Department, Health and Human Services, Labor and Social Security. They noted that the growth in national health spending in the U.S. has slowed in recent years.
But they said it was unclear how much of that reflected the temporary effects of the economic downturn, as opposed to systemic changes in how health care is being used and paid for that could result in savings in years to come.
The slowdown in growth helped keep the Medicare program solvent for an additional year longer than the last projection and helped avoid activating the Independent Payment Advisory Board, a 15-member board that is tasked with proposing Medicare cuts if spending grows faster than a target rate.
“The trajectory is still alarming. That is why the trustees issue the warning that we do — the same warning that has been issued for years now — that Congress must act to ensure the long-term fiscal viability, sustainability and survival of Medicare and Social Security,” said Health and Human Services secretary Tom Price. He said that the report is based on assumptions that reflect current law and that it does not factor in the possible repeal of the Affordable Care Act.
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