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3/19/2020

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

Fact Sheet: Social Security and Medicare Trustees Report
June 5, 2018

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, 2032 for Social Security’s Disability Insurance program,
and until 2034 for Social Security’s Old Age and Survivors 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
2017 to 5.8 percent of GDP by 2038, and will increase gradually therea er to about 6.2 percent
of GDP by 2092. The costs of the Social Security program equaled 4.9 percent of GDP in 2017 and
are expected to rise to 6.1 percent of GDP by 2038, decline to 5.9 percent of GDP by 2052, and
then rise slowly to 6.1 percent of GDP by 2092.

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 2034. The 75-year actuarial deficit for the combined
trust funds is estimated at 2.84 percent of taxable payroll, up very slightly from 2.83 percent of
taxable payroll estimated in last year’s Report. This reflects a 0.06 percentage point worsening
due to extending the projection period and valuation date one year, and a 0.04 percentage point
improvement due to new data and improved projection methods.
While the projections for the combined Trust Funds are essentially unchanged from last year,
the near-term projections for the DI Trust Fund are more favorable and the near-term
projections for the OASI trust fund are less favorable. It is now projected that the DI will have
su icient funds to pay full scheduled benefits until 2032, four later than projected last year, and
that the OASI trust fund will have su icient funds to pay full scheduled benefits through to 2034,
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Fact Sheet: Social Security and Medicare Trustees Report | U.S. Department of the Treasury

one year earlier than last year. This is the third year in a row that the near term DI cost outlook
has appreciably improved, reflecting a continuing favorable experience for DI applications and
benefit awards.
Social Security’s total cost is projected to exceed its total income (including interest) in 2018 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, three years earlier than 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 91 percent for the remainder of 2026, declines slowly to 78 percent in
2039, and then rises gradually to 85 percent in 2092.
The 75-year actuarial deficit in the HI Trust Fund is projected at 0.82 percent of taxable payroll,
up from 0.64 percent projected in last year’s report.
The changed outlook for HI is attributable to adverse changes in both program income and
costs. HI income is projected to be lower than last year’s estimates due to lower payroll taxes
attributable to lowered wages in 2017 and lower levels of projected GDP, and reduced income
from the taxation of Social Security benefits as a result of legislation. HI expenditures are
expected to be higher than last year’s estimates due to higher-than anticipated spending in
2017, legislation that increases hospital spending, and higher Medicare Advantage payments.
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 2017 to approximately 3.6 percent of GDP in 2037, and to
then increase more slowly to 3.9 percent of GDP by 2092. 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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