2019 Social Security Trustees Report: Financial Problems Ahead

Each year the Trustees of the Social Security and Medicare trust funds report on the current and projected financial status of the two programs. Last month, the Board of Trustees released its 2019 Social Security Trustees Report, which is  summarized below.

SOCIAL SECURITY

The report provides an annual assessment of the financial health of the Social Security programs. Social Security has two trust funds — a trust for retirement and survivors’ benefits, called the Old Age and Survivors (OASI) trust, and another trust for disability insurance (DI).

The Social Security program provides workers and their families with retirement, disability, and survivors insurance benefits. Workers earn these benefits by paying into the system during their working years. Over the program’s 84-year history, it has collected roughly $21.9 trillion and paid out $19.0 trillion, leaving asset reserves of $2.9 trillion at the end of 2018 in its two trust funds.

The report finds that the Social Security DI trust fund is now projected to be fully funded another 33 years, until the year 2052. This projection is 20 years longer than what was estimated just last year, and is a result of years of declining DI applications and disability beneficiaries.

The Trustees’ Report also finds that the retirement and survivors trust fund will be fully funded until the year 2034, after which it will be able to pay individuals approximately 77 percent of the benefits they are owed over the next 75 years.

Under current projections, the annual cost of Social Security benefits expressed as a share of workers’ taxable earnings will grow from 13.8 percent in 2018 to roughly 16.6 percent in 2040, and will then decline slightly before slowly increasing after 2051.

Millions of Americans depend on Social Security to meet their needs as they age, or when they are faced with serious disabilities or the untimely death of a family member.

MEDICARE

The Medicare program helps pay for health care services for the aged, and disabled individuals. Medicare has two separate trust funds. The Hospital Insurance (HI) Trust Fund, otherwise known as Medicare Part A, helps pay for inpatient hospital services, skilled nursing facility, home health services and hospice care.

The Supplementary Medical Insurance (SMI) Trust Fund consists of separate accounts for Medicare Part B and Part D. Part B helps pay for physician, outpatient hospital, home health, and other services. Part D provides prescription drug insurance coverage.

The Trustees project that the HI Trust Fund will be depleted in 2026. At that time dedicated revenues will be sufficient to pay 89 percent of HI costs. The Trustees project that the share of HI cost that can be financed with HI dedicated revenues will decline slowly to 77 percent in 2046, and will then rise gradually to 83 percent in 2093.

For SMI, the Trustees project that both Part B and Part D will remain adequately financed into the indefinite future because current law provides financing from general revenues and beneficiary premiums each year to meet the next year’s expected costs.

The 2019 Social Security Trustees Report is attached here-

For additional information concerning social security disability appeals, visit:

Social Security Disability Appeals

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