Social Security, Medicare Trustees Project Trust Fund Insolvency by 2034 and 2031 Respectively

The 2023 Annual Reports from the Social Security and Medicare trustees project that the Social Security Trust Fund will face insolvency in 11 years, and the Medicare Trust Fund in eight years.

The report noted that if Congress does not make changes to the Social Security benefits and financing structure, the trust fund from which Social Security benefits are paid will be unable to make full payments to all beneficiaries by 2034. Without action to fix the problem, beneficiaries will face an across-the-board 20 to 23 percent reduction in benefits, the report stated.

For Medicare, the trust fund insolvency date is in 2031, eight years from now, according to this year’s trustees report. That is a three-year improvement over the 2028 insolvency for Medicare trust fund projected by the 2022 trustees report.

Prospects: The annual projection of insolvency dates for the Social Security and Medicare trust funds is a bit of a moving target—it changes by a year or two (or three) each year. But it is clear that Congress will have to tackle this “third rail of politics” issue sooner rather than later. No one can tolerate the prospect of 20 percent (or greater) benefits cuts to Social Security recipients, or Medicare beneficiaries/providers. However, addressing these issues is unlikely to happen this year. Remember, both the President and Congress have agreed that Social Security and Medicare cuts are “off the table” in this year’s budget debates.