'Peace of mind' for retirees: Social Security and Medicare won't run out of money as quickly as feared — but critics still say current policy is 'condemning' seniors to benefit cuts

‘Significant financing issues’

The Trustees of the Social Security and Medicare trust funds kicked off their 2024 report summary with a simple fact: “both [Social Security and Medicare] continue to face significant financing issues.”

The Old-Age and Survivors Insurance (OASI) trust fund, which is used to pay retired workers, their spouses and children, and survivors, is expected to last until 2033 — after which the fund will only be able to meet 79% of its obligations.

Americans that receive or care for those receiving disability insurance (DI) can breathe a little easier. According to the report, the disability insurance trust fund is projected to be able to pay 100% of total scheduled benefits through at least 2098.

When the OASI and DI funds are combined, the resulting OASDI trust fund is expected to be able to meet 100% of its financial commitments until 2035 — which is one year later than the trustees reported last year, due primarily to higher projected labor productivity and a lower long-term-disability incidence rate.

After 2035, the OASDI’s continuing total fund income will only be enough to pay 83% of scheduled benefits.

By law, the two funds cannot actually be combined. The OASDI projection is used to indicate the overall status and solvency of Social Security.

Meanwhile, Medicare’s go-broke date for its hospital insurance (HI) trust fund was delayed by five years to 2036 in the latest report, which the trustees attributed, in part, to higher payroll-tax income and lower-than-projected expenses from last year.

Again, once the HI fund’s reserves are depleted, Medicare — the federal health insurance program that covers people age 65 and older and those with severe disabilities or illnesses — would only be able to cover 89% of its typical costs.

Politicians react

President Joe Biden reacted to the trustees’ report on X, claiming a win: “Medicare is stronger and Social Security remains strong. My economic plan has helped extend Medicare solvency by a decade. And I am committed to extending Social Security solvency by making the rich pay their fair share.”

Rather than raising taxes on select individuals to help fund the welfare programs, the majority of House GOP lawmakers seemingly would take a different approach.

In March, a budget released by the Republican Study Committee, a group of more than 170 House GOP lawmakers, endorsed “modest adjustments to the retirement age for future retirees to account for increases in life expectancy,” as well as converting Medicare into a “premium support model.”

Those conflicting approaches prove that one party alone is unlikely to solve the financial crisis that lurks deep in Social Security and Medicare programs, according to House Budget Committee Chairman, Jodey C. Arrington.

“We have the highest levels of indebtedness in our nation’s history, an inflationary and anemic economy and the two most important senior safety net programs facing insolvency,” Arrington, released in a statement. “The trustees report only reiterates why we need a bipartisan Fiscal Commission to address the Social Security and Medicare Trust Funds and the $140 trillion unfunded liability on America’s balance sheet.

“Republicans and Democrats have both proven they will not fix Social Security on their own. We must put our seniors and country first and work together to find a solution. Doing nothing is condemning our seniors to automatic benefit cuts and our country to a future debt crisis.”