The 2013 Old Age, Survivors and Disability Insurance Program (OASDI) Trustees report has estimated that the Hospital Insurance Trust Fund, which pays Medicare's hospital costs, will become insolvent in 2026, two years later than last year’s projection. They also reported that Social Security will become insolvent in 2033, the same estimation reached in 2012.
According to the report, this improved outlook for Medicare is due to lower than projected spending in 2012 for most covered services, especially for skilled nursing care. The report also attributes certain provisions of the Affordable Care Act (ACA) with lowering projected Medicare Advantage program costs, and suggested that the ACA will reduce growth in these costs by more than was previously estimated.
As for Social Security, the Trustees announced that the combined trust fund reserves are still growing and will continue to do so through 2020. However, in 2021 the cost of the program is projected to exceed income and in 2033 the reserves will be depleted. At that time, there will only be sufficient income coming in to pay 77 percent of scheduled benefits.
“The Social Security Trust Funds’ projected depletion dates have not changed, and three-fourths of benefits would still be payable after depletion. But the fact remains that Congress needs to act to ensure the long-term solvency of this vital program,” said Carolyn W. Colvin, Acting Commissioner of Social Security. “The projected year for Disability Insurance Trust Fund depletion remains 2016, and legislative action is needed as soon as possible to address this financial imbalance.”
Read the 2013 OASDI Trustees Report: The 2013 Annual Report of the Board of Trustees of the Federal Old-Age and Survivors Insurance and Federal Disability Insurance Trust Funds.
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