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3/19/2020

Fact Sheet: 2019 Social Security and Medicare Trustees Reports | U.S. Department of the Treasury

Fact Sheet: 2019 Social Security and Medicare Trustees Reports
April 22, 2019

Washington – Today the Social Security and Medicare Boards of Trustees issued their annual
financial review of the programs.
The projections indicate that income is su icient to pay full scheduled benefits until 2026 for
Medicare’s Hospital Insurance program, 2034 for Social Security’s Old Age and Survivors
Insurance program, and until 2052 for Social Security’s Disability Insurance program. The
Supplementary Medical Insurance (SMI) Trust Fund remains adequately financed throughout
the projection period, but only because SMI has unlimited access to general revenues.
The Trustees project that Medicare costs will grow from approximately 3.7 percent of GDP in
2018 to 5.9 percent of GDP by 2038, and will increase gradually therea er to about 6.5 percent
of GDP by 2093. The costs of the Social Security program equaled 4.9 percent of GDP in 2018 and
are expected to rise to 5.9 percent of GDP by 2039, decline to 5.8 percent of GDP by 2052, and
then rise slowly to 6.0 percent of GDP by 2093.

SOCIAL SECURITY
The Social Security program consists of the Old-Age and Survivors Insurance (OASI) Trust Fund
and the Disability Insurance (DI) Trust Fund. The Trustees project that the hypothetical
combined Trust Funds will be depleted in 2035. The 75-year actuarial deficit for the combined
trust funds is estimated at 2.78 percent of taxable payroll, down from 2.84 percent of taxable
payroll estimated in last year’s Report. This reflects a 0.05 percentage point worsening due to
extending the projection period and valuation date one year that was more than o set by a 0.11
percentage point improvement due to new data, changed assumptions, and improved
projection methods.
The financial outlook for the separate DI trust fund has substantially improved. The DI depletion
date is now 2052, 20 later than projected last year, and the DI actuarial balance is -0.12 percent
of taxable payroll, 0.09 percentage points larger (less negative and more favorable) than last
year. These changes are largely due to continuing favorable experience for DI applications and
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Fact Sheet: 2019 Social Security and Medicare Trustees Reports | U.S. Department of the Treasury

benefit awards. The 20-year extension to the life of the DI Trust fund is large relative to the 0.09
percentage point improvement in the DI 75-year actuarial balance. This is because in last year’s
Report DI income was projected to be very near to DI cost for many years a er the projected
2032 depletion date, so that a relatively small improvement in the program’s projected cash
flow has large implications for the projected depletion date.
Social Security’s total cost is projected to exceed its total income (including interest) in 2020 for
the first time since 1982, and to remain higher throughout the projection period.

MEDICARE
Medicare has two Trust Funds: the Hospital Insurance (HI) Trust Fund and the Supplementary
Medical Insurance (SMI) Trust Fund. The Trustees project that the HI Trust Fund will pay full
scheduled benefits until 2026, the same year projected in last year’s Report. A er the HI trust
fund is depleted in 2026, the share of scheduled benefits that can be paid from dedicated
revenues is 89 percent for the remainder of 2026, declines slowly to 77 percent in 2046, and then
rises gradually to 83 percent in 2093. The 75-year actuarial deficit in the HI Trust Fund is
projected at 0.91 percent of taxable payroll, up from 0.82 percent projected in last year’s Report.
Several factors contributed to the change in the actuarial deficit, most notably lower assumed
productivity growth (+0.10 percent of taxable payroll), slower projected growth in the utilization
of skilled nursing facility services (-0.10 percent), higher costs and lower income in 2018 than
expected (+0.04 percent), lower real discount rates (+0.03 percent), and other factors.
The SMI Trust Fund, which includes Medicare Part B and Medicare Part D, remains adequately
financed into the future due to financing being derived from general revenues and beneficiary
premiums. The aging population and rising health care costs cause SMI projected costs to grow
steadily from 2.1 percent of GDP in 2018 to approximately 3.7 percent of GDP in 2038, and to
then increase more slowly to 4.2 percent of GDP by 2093. About three-quarters of these costs
will be financed from general revenues, and the remaining will be financed from premiums paid
by beneficiaries.
A er the Reports are transmitted to Congress, the Social Security Report and the Medicare
Report will be posted at:
Social Security Report
Medicare Report

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