By Chuck Buck Original story posted on: May 13, 2011
May 13, 2011 ----Citing the sluggish economy, the Trustees of the Social Security and Medicare trust funds reported today that the Medicare Trust Fund is expected to be insolvent in 2024, five years earlier than predicted in their annual report last year.
The report, released today, stated that, “the financial conditions of the Social Security and Medicare programs remain challenging. Projected long-run program costs for both Medicare and Social Security are not sustainable under currently scheduled financing, and will require legislative modifications if disruptive consequences for beneficiaries and taxpayers are to be avoided.”
Both Social Security and Medicare, the two largest federal programs, face substantial cost growth in the upcoming decades due to factors that include population aging as well as the growth in expenditures per beneficiary, according to the report.
Through the mid-2030s, due to the large baby-boom generation entering retirement and lower-birth-rate generations entering employment, population aging is the largest single factor contributing to cost growth in the two programs. Thereafter, the continued rapid growth in health care cost per beneficiary becomes the larger factor, according to the report.