When will Medicare and Social Security end? According to a recently released report, the Medicare Part A hospital insurance fund is expected to be able to fully pay for scheduled benefits through 2033, three years earlier than expected last year. Social Security and Medicare are expected to reduce monthly benefits in less than a decade, as trust funds for both programs are on track to run out sooner than previously expected. At that time, the government will not be able to pay all benefits for inpatient hospital visits, nursing home stays, and home health care. In just eight years, retirees will face severe cuts to their Social Security and Medicare benefits.
Under the law, your Social Security checks will be reduced by 23 percent, while access to health care will be limited due to an 11 percent cut in Medicare payments. Medicare Part B and D income is determined annually to meet expected spending obligations for the following year, meaning that the SMI trust fund is not facing a funding shortfall, unlike the HI trust fund. While current projections show that the Medicare HI trust fund's short-term solvency prospects have improved, the Medicare program continues to face long-term financial pressures associated with rising health care costs and an aging population. Medicare, the federal health insurance program for 67 million people age 65 and older and younger people with long-term disabilities, helps pay for hospital and doctor visits, prescription drugs and other acute and post-acute care services. Evaluating such changes would likely involve careful deliberation about the effects on federal spending, Medicare program finances, and beneficiaries, healthcare providers and taxpayers.
The hospital insurance trust fund pays for Medicare Part A, which covers care provided in hospitals and skilled nursing facilities, as well as some home care. However, the expected increase in spending on benefits covered by Part B and Part D will increase the amount of general income and beneficiary premiums needed to cover the costs of these parts of the Medicare program in the future. The American Medical Association said that the report highlights the need to change policies, such as linking the annual update of payments to doctors with the Medicare economic index, a measure of inflation in doctors' office costs, a suggestion that also has the support of the influential congressional advisory group, MedPac. Physician groups, who always criticize Medicare for its low rates of payment, used the report to lobby for spending reform to align reimbursement with the cost of practicing medicine.
The distribution of Medicare funding changes largely because trustees project that the costs of Part B and especially Part D will increase at a faster rate than those of Part A. Part D also receives payments from states that reflect the estimated amounts they would have paid for the costs of prescription drugs for people who qualify for Medicare and Medicaid if Medicaid had remained the primary payer. Last year's expenses for the Medicare hospital insurance trust fund were also higher than originally expected, according to the report, contributing to a delay in the program's bankruptcy date.
