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The Future of America’s Entitlements: What You Need to Know About the Medicare and Social Security Trustees Reports

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Today, the Council of Social Security and Medicare has published an annual report detailing the financial status of the two largest qualification programs in the United States. The report reflects past conclusions: Social Security and Medicare are still bankrupt.

Medicare goes bankrupt at the current pace 2028 And the Social Security Trust Fund for old-age benefits and disability benefits 2035..

A quick glance at the data shows how broken the current entitlement program is. An American Action Forum analysis of the data found other amazing statistics, including:

  • Medicare’s annual cash shortage in 2021 was $ 409 billion.
  • In order to pay for Medicare Apartment A in 2021, the payroll tax had to be raised by almost 18 percent.When
  • Over the next 75 years, social security will borrow $ 20.4 trillion more than expected.

What you need to know about Medicare and Social Security Trustee Report Contains one-page pager and related statistics for:

  • Medicare solvency;
  • Medicare Presidential Management;
  • Social Security Trust Fund solvency;
  • Ability to pay for social security disability insurance (DI) programs.When
  • Ability to pay for social security old-age insurance and survivor insurance (OASI) programs.

This week, Treasury Secretary Janet Yellen released the 2022 Medicare Fiduciary Report. This annual report further reminded the American people that Medicare was definitely bankrupt.

The report estimates that the Medicare Hospital Insurance Trust Fund will go bankrupt by 2028. Bankruptcy predictions may catch headlines, but there are three important budget figures that shouldn’t be overlooked.

$ 490 billion

 Medicare’s annual cash shortage in 2019

  • In 2021, Medicare spent $ 839.3 billion on medical services for the elderly in the United States, but collected only $ 430.5 billion in payroll taxes and monthly premiums.
  • This cash shortage represents 15 percent of the 2021 federal deficit.

$ 6.4 trillion

 Medicare’s cumulative cash shortage since 1965

  • Medicare has run out of cash every year since its inception, with the exception of two in 1966 and 1974.
  • Medicare makes up for these cash shortages by “borrowing” irrelevant tax revenues from other programs.

29 percent

 Medicare’s True Contribution to National Debt

  • The US financial trajectory is unsustainable and Medicare is a major source of red ink.
  • Medicare’s cash shortage accounts for about one-third of federal debt.

It is unacceptable to continue the status quo of Medicare. Balancing Medicare’s annual cash shortages under the existing system proves to be devastating to the elderly, and failure to reform the status quo will have the following implications:

18 percent increase

Annual salary-tax increase required to balance Medicare Apartment A

  • In 2021, Medicare Apartment A (hospital) had a cash shortage of $ 53.7 billion.
  • To balance, payroll tax should increase from 1.45% to 1.7%.

$ 4,728 increase

 Increased annual premiums required to balance Medicare Apartment B

  • In 2021, Medicare Apartment B (Doctor) had a cash shortage of $ 294.5 billion.
  • To balance, seniors’ premiums to doctors need to increase by 265%. This means that typical annual physician insurance premiums for the elderly will rise from $ 1,782 to $ 6,510, an increase of $ 4,728.

$ 1,953 increase

 Increased annual premiums required to balance Medicare Apartment D

  • In 2021, Part D (prescription drug) cash shortage was $ 88 billion.
  • To balance, prescription drug premiums for the elderly need to increase by 517%. This means that annual drug insurance premiums for the elderly will rise from $ 378 to $ 2,330, an increase of $ 1,952.

Evaluation of Medicare Stewardship of Government Agency

Each year, the Board of Trustees report provides a nonpartisan assessment of the president’s management of Medicare. The Board of Trustees report, produced annually for Congress by the Supreme Actuary Office, provides unparalleled details on the financial operations and actuarial status of the Medicare program. In short, it’s where the soaring Medicare rhetoric of all governments meets the financial reality. So far, President Biden has resisted embarking on important Medicare reforms. The 2022 Board of Trustees report provides a sense of what the future holds if Medicare remains unchanged, and why Medicare reform is inevitable sooner or later.

Medicare Finance (Billions)

Medicare Treasury Chart

The Obama administration has overseen a $ 2.4 trillion cash shortage for eight years (2009-2016). The Trump administration oversaw its $ 1.6 trillion Medicare cash shortage during this presidential term. The financial reality is that continuing the Medicare policies of the previous two governments and leaving Medicare unchanged is all but guaranteeing bankruptcy. The Board of Trustees predicts that President Biden will oversee a $ 854 billion cash shortage even during his first term.

With this unprecedented level of cash shortages continuing within budget, maintaining the status quo will soon eliminate Medicare for future generations of Americans, as well as today’s older people. Is guaranteed. These rising costs and the steps needed to cover them will do more and more harm to the elderly if Medicare reforms are not implemented.

Medicare and Medicaid will cost $ 2 trillion by 2024 Medicare costs continue to rise

  • At the current pace, Medicare and Medicaid programs are on track to exceed $ 2 trillion annually in two years (see here for details).
  • This budget shortfall is expected to continue even as Medicare premiums and deductions increase each year (see here for details).

This week, the board overseeing the social security program released its annual report. The report shows that the financial outlook for the state’s major safety nets for retirees, survivors, and persons with disabilities would not be able to fulfill its promises to future seniors without meaningful reforms. I am.

The report estimates that the combined Social Security Trust Fund (for retirement and disability) will be exhausted by 2035, a year later than last year’s estimate. The Board report reveals a structural imbalance in programs that endanger the retirement benefits of millions of working Americans.

$ 126.4 billion

 Social Security Contribution to 2021 Debt

  • In 2021, social security spent $ 1.1446 trillion, but non-interest income was only $ 1.182 trillion.
  • This year, social security has run out of cash for the 12th consecutive year, with the program running a cumulative deficit of $ 807.2 billion since 2010.

$ 20.4 trillion

 75 years of unfunded responsibility for social security

  • The promised profits of social security exceed the expected payroll tax and trust fund redemptions by $ 20.4 trillion. That’s $ 600 billion more than last year’s estimate.
  • Social security faces an imbalance as a share of taxable salaries of 3.42 percent. This is a slight improvement over last year’s long-term deficit, but it is the second worst imbalance in 40 years.

13 years

 Number of years until the trust fund is used up

  • The trust fund will be exhausted in 13 years, the same period estimated in last year’s report.
  • This depleted horizon has remained the shortest since 1982.

The Board report depicts the dire situation of social security financial conditions and shows that the current course is unsustainable. Social security is currently contributing to the annual deficit, but promised profits exceed planned funding by more than $ 20 trillion.Meaning of failure to reform status quo that is:

20 percent

 Decrease in profits in 2035

  • After the expected depletion of the Social Security Trust Fund, social security income will only fund 80 percent of the promised profits.
  • This part will be even worse by 2096 to 74%.

26 percent

 Payroll tax increase

  • Without reforms, payroll taxes would have to be raised immediately from 12.4 percent to 15.64 percent to 26 percent to meet long-term promised profits.

This week, the board overseeing the social security program released its annual report. The report reflects the ongoing improvement in the outlook for the disability insurance (DI) program.

Report by DI Trust Fund solvent In the long run.. This outlook is the first time the program has been sustainable for a long time since 1983. The program faces recent solvency challenges and required payroll tax reallocation in 2015.

$ 85.3 billion

10-year contribution to DI debt

  • In 2021, the DI program went bankrupt for the second year in a row, adding $ 85.3 billion to debt since 2012.
  • Recent improvements in the program’s cash position reflect a significant reduction in benefit applications and incentives, as well as higher allocations of salary income, thereby with the amount paid to the Old Age and Survivor Insurance (OASI) Trust Fund. The same amount of salary income will decrease.

-$ 56 billion

 DI Unfunded 75-Year Debt

  • The promised disability benefits of social security are long-term funded, the first program in 39 years.

The Board report reflects a significant decline in the outlook for the US safety net for disabled workers.

This week, the Board of Trustees, which oversees the social security program, released an annual report. The report shows that the Old Age and Survivor Insurance (OASI) program remains unsustainable and cannot meet the needs of future beneficiaries without reform.

The report estimates that the OASI Trust Fund will be exhausted by 2034. The report also reveals some additional structural challenges that endanger millions of current and future retirees and survivors who depend on this program.

$ 126.5 billion

 OASI’s contribution to debt in 2021

  • In 2021, OASI spent $ 111.9 billion, but non-interest income was only $ 87.40 billion.
  • This is the 12th consecutive year that OASI has run out of cash, and the program has added $ 655.5 billion to debt since 2010.

$ 20.5 trillion

 OASI’s Unfunded 75-Year Debt

  • The promised severance pay and survivor benefits for social security exceed the expected payroll tax and trust fund redemptions by more than $ 20.5 trillion. That’s an increase of over $ 1 trillion from last year’s report.

12 years

 Number of years until the OASI Trust Fund is exhausted

  • The period until the trust fund depletion date has not changed from last year’s estimate.
  • Since 1982, the shortest time to run out of trust funds is 12 years.

71.6 million

 Number of beneficiaries in 2034 (year of trust fund depletion)

  • Over 71 million Americans are expected to benefit from OASI in the year when trust funds are expected to be exhausted.
  • This figure consists of nearly 65 million retirees and 5.7 million survivors.

The Board report reveals that major federal retirement programs remain unsustainable. In the current course, the program will reduce severance benefits for more than 71 million Americans or significantly raise taxes on future workers.

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