Medicare’s hospital insurance trust fund will be unable to pay full benefits in 2033, unchanged from last year’s estimate, while Social Security’s retirement trust fund is projected to face a funding shortfall in 2032, according to an annual report released Tuesday.
Rising healthcare costs and government spending have contributed to a projected depletion date that is less than 10 years from now.
The looming challenge for the programs is a partial funding gap, not a collapse. Even after trust fund depletion, the system will continue issuing benefits, albeit at reduced amounts.
Last year, Medicare’s hospital insurance trust fund go-broke date was pushed to 2033 from 2036 the year before that, according to the report from the programs’ trustees.
About 70.1 million people are enrolled in Medicare, the federal government’s health insurance that covers those 65 and older, as well as people with severe disabilities or illnesses.
Meanwhile, Social Security’s combined trust funds — which cover old age and disability recipients — will be unable to pay full benefits beginning in 2034, unchanged from the 2025 report. After that, incoming revenue would cover about 83% of scheduled benefits.
The trustees, who include the Social Security commissioner and the secretaries of treasury, labor, and health and human services, say the latest findings show the urgency of needed changes to the programs, which have faced dire financial projections for decades. But making changes to the programs has long been politically unpopular, and lawmakers have repeatedly kicked Social Security and Medicare’s troubling math to the next generation.
Social Security Commissioner Frank Bisignano said President Donald Trump’s administration is “committed to protecting and strengthening Social Security” and “eliminating waste, fraud, abuse, and ensuring program integrity.”
The new funding shortfall is mainly the result of lower projected birth rates, reduced immigration, and reduced trust fund revenue due to the costs of Republicans’ massive tax and spending bill that Trump signed into law last summer, according to the report.
Nancy Altman, president of the Social Security Works advocacy group, said the latest report takes “Donald Trump’s second term policies into account: A tax bill that largely benefited the wealthy, economy-wrecking tariffs, a needless war with Iran, and hostility to immigrants. All of these have reduced the amount of money going into Social Security, weakening the system’s finances.”
Social Security benefits were last reformed roughly 40 years ago, when the federal government raised the eligibility age for the program from 65 to 67. The eligibility age of 65 has never changed for Medicare.
