Medicare’s hospital insurance trust fund will be able to pay full benefits until 2036, five years later than projected a year ago, according to a report released Monday by the Treasury Department.
The hospital fund’s long-term financial picture improved thanks to higher income, stemming from both an increased number of workers and higher average wages, as well as from lower expenditures compared to last year’s estimates.
From 2036, barring policy changes from Congress, the fund will only be able to pay 89% of total scheduled benefits, the report said.
Compared to last year, the findings reflect slightly more positive data in the 2024 Annual Report of the Boards of Trustees of the Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds. The report offers a detailed look at the finances of the Medicare and Social Security programs.
The Social Security system’s retiree fund will be able to fully pay scheduled benefits until 2033, a separeate report said, in line with last year’s estimates. At that point, continuing program income will be sufficient to pay just 79% of total scheduled benefits.
Despite the improvement on the Medicare side, the reports still serve as a warning, according to Michael Peterson, chief executive officer of the Peter G. Peterson Foundation, a watchdog group.
“Today’s Trustees reports drive home the fact that the clock is ticking down on automatic cuts to Social Security and Medicare,” he said in a statement. “It’s actually harmful to promise not to touch these essential programs, because failing to act will mean significant, immediate cuts that affect millions of Americans.”
The difference between Medicare’s total outlays and its financing sources is expected to exceed 45% of outlays within seven years, the report said. This triggers a “Medicare funding warning,” requiring the president to submit legislation to Congress to address the warning within 15 days after the fiscal 2026 budget is submitted.
Copyright Bloomberg News
Five low-cost index ETFs to anchor Trump Accounts as advisors weigh options against 529 and UTMA plans for clients
A bipartisan proposal aimed at aligning advisor compensation rules with modern business structures is headed to the full House.
Vanilla is extending its estate planning tech to Callan Family Office's ultra-high-net-worth business, while WealthFeed's organic growth engine will now be available to roughly 100 advisors at The Mather Group.
“We are helping families take an important first step toward building a financial foundation for the next generation,” said Franklin Templeton CEO Jenny Johnson
Richard Brothers Financial Advisors joins the fee-only RIA, adding its first Maine office and $240 million in client assets
Dan Biagini of American Equity says the steady decline of pensions, longer lifespans and a reset in interest rates are rewriting how advisors build retirement income
Direct indexing is on pace to outgrow ETFs and mutual funds. Northern Trust's Ken Lassner explains why the advisors who get it wish they had started sooner.
