The Social Security Trust Fund is sufficient to continue paying benefits at current levels through 2033, according to the Social Security and Medicare Boards of Trustees annual reports released today. This is unchanged since last year’s reports. The projected life of the Medicare Hospital Insurance Trust Fund has increased four years since the 2013 report, with enough funds to cover benefits through 2030. The trustees credit cost-saving provisions of the Affordable Care Act (ACA) with expanding the life of Medicare.
While the combined trust funds of Social Security Retirement and Social Security Disability Insurance (DI) will last for the next 19 years, when separated, the DI fund has a projected life of only two years. The DI costs have exceeded the fund’s non-interest income every year since 2005, and the fund will be exhausted near the end of 2016. Both the Social Security and Medicare programs will experience rapid growth during the 2030s as baby boomer retirements peak, and the number of new beneficiaries outpaces the workers contributing to the fund.
According to Carolyn W. Colvin, Acting Commissioner of Social Security, 11 million currently depend on DI benefits. If congress takes no action, the DI fund's income will cover only 81 percent of current benefits after 2016. Payroll taxes will only cover 77 percent of Social Security retirement benefits once that trust fund is depleted in 2033. Treasury Secretary Jacob Lew, at a press conference held today, stresses the necessity of reforming these programs to avoid these disruptions in benefits.
“Lawmakers should address the financial challenges facing Social Security and Medicare as soon as possible. Taking action sooner rather than later will leave more options and more time available to phase in changes so that the public has adequate time to prepare.” — Trustees of the Social Security and Medicare trust funds
Health and Human Services Secretary Sylvia M. Burwell credits the ACA with helping to slow the annual growth of Medicare per-beneficiary cost to less than 1 percent. She notes that since the enactment of the ACA, the life of the Medicare Trust fund has been extended 13 years; the quality of care has increased and seniors have better access to preventative services and are better able to afford their prescriptions. The 2015 Part B premiums are projected to remain at $104.90 as they have been since 2013.