The overseers of Medicare and Social Security have issued a warning about the financial health of the government's bedrock retirement programs for middle- and working-class Americans, CNBC reported Monday.
The latest report indicates Medicare will become insolvent by 2026, with the same fate awaiting Social Security in 2035.
The programs' overseers said Social Security's total cost is projected to exceed its total income in 2020, and its trust funds will be depleted 15 years later, at which point enrollees would face an approximate 25 percent reduction in benefits, according to the Washington Examiner.
The portion of Medicare that funds in-patient hospital and hospice care will run out of full funding in 2026, according to the trustees report, and then it would pay a diminishing amount of reimbursement for costs.
The cost of Medicare is projected to increase steadily as a share of GDP from its current 3.7 percent to 6 percent by 2043.
"Lawmakers have many policy options that would reduce or eliminate the long-term financing shortfalls in Social Security and Medicare," write the trustees, who are all appointees of President Donald Trump, including the secretaries of Treasury, Labor, and Health and Human Services. "Taking action sooner rather than later will permit consideration of a broader range of solutions and provide more time to phase in changes so that the public has adequate time to prepare."
However, CNBC points out neither Trump nor both parties in Congress have made politically difficult cuts in the programs' costs a major priority.
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