The funds for Medicare and Social Security are running out and fast. Medicare funds are expected to dry out by 2026, a good three years before the previously-projected timeframe, while the deadline for the depletion of Social Security remains unchanged at 2034. Around 60-62 million people are dependent on Medicare and Social Security, and the average monthly payment for beneficiaries is close to $1,300.
Medicare and Social Security, which are financed from payroll taxes, are crucial in helping Americans concerning healthcare and general welfare. Medicare is facing difficulties from an increase in the number of recipients as well as burgeoning healthcare costs. The recent cut in taxes has also hit the system’s funding. In 2017, Medicare spending amounted to more than $700 billion.
Although the portion of Medicare that covers hospital and nursing care expenses is expected to run out by 2026, the other parts which cover outpatient costs and prescription drugs are not in any immediate danger as their funding includes monthly premiums and other sources of federal revenue. However, these are likely to see an increase in costs at that time.
To increase the funding for both programs, the government can either raise the taxes, reduce the benefits or do both. Either way, authorities believe it is absolutely necessary for the government to take action immediately so that there is enough time for the involved parties to make necessary adjustments and also to make sure enough funds are shored up to avoid any deficits.