The Social Security Trust Fund, which covers benefits to retirees, workers’ survivors and people with disabilities, will be able to pay full benefits until 2035, gaining an additional year beyond what was projected last year, according to the report issued by trustees for Medicare and Social Security.
But still, the trustees warned about the future of the entitlement programs, among the nation’s largest, expressing concern that both face long-term financing shortfalls. The projections in the report for Medicare — which covers nearly 64 million people — indicate a “need for substantial changes” to address the program’s fiscal challenges, the report states.
The trustees’ report has regularly sounded a note of caution on the fragility of both programs, which are intended to help keep older Americans out of poverty. The aging of the U.S. population, combined with their increased longevity, have compounded the financial pressure, yet congressional action is unlikely amid fierce divisions over how to solve the problems.
The trustees are assuming the coronavirus pandemic — which initially delayed and changed how some older adults receive care — won’t have a long-term effect on the projections for either program’s finances. But the report notes that there isn’t a consensus among experts on what the lasting impact of the pandemic might be, and that the intertwined paths of the economy and the pandemic have grown more uncertain since the development of the reports’ assumptions in mid-February.
The insolvency of the trust funds doesn’t mean the programs will no longer operate. Instead, they may begin paying out smaller benefits. If the Social Security Trust Fund is depleted in 2035, then the government would pay 80 percent of scheduled benefits. And if Medicare’s trust fund for inpatient care runs short, then the program would be able to pay 90 percent of expected costs in 2028, the trustees’ report said.