The Medicare and Social Security Trustees report says Social Security and Medicare will run out of money sooner than anticipated. The annual report, which provides an update on the solvency and cost of the two entitlement programs, blames the sluggish economy for the changes.
The Hospital Insurance fund, which pays for hospital stays of Medicare recipients, will run out in 2024, five years earlier than last year's report estimate. The Social Security Trust Fund will be exhausted in 2036. When the trust fund runs dry, Social Security benefits do not stop but decrease by 22%
The entitlement programs, which cover one-third of the U.S. population, account for a growing piece of the budget. As Washington and the public express concern with the size of the deficit, this report by the Board of Trustees will influence how they fit into the budget debate.
Treasury Secretary Timothy Geithner said Medicare reforms "will be needed."
In his health care speech Thursday, potential presidential candidate Mitt Romney (R-MA) said making Medicare solvent should be a top priority but did not offer any specifics of how he would do it.
In 2009, nearly 57 million people received Social Security benefits and 46 million people received Medicare benefits.
Last year’s report found that long-term Social Security solvency was largely unchanged, but the 75-year outlook for Medicare improved "substantially" because of the passage of the health care law. Before the passage of health care, Medicare benefits were expected to decrease as early as 2016.
The Board of Trustees consists of six people, the Treasury Secretary, the Secretary of Health and Human Services, the Secretary of Labor and the Social Security Commissioner. The final two members are public employees appointed by the President.