Medicare will run out of money sooner than expected, the government announced Tuesday.
Indeed, the trustees of Social Security and Medicare forecast the program's reserves will be depleted by 2034, at which point it won't be able to pay full benefits on a timely basis.
The program is now expected to deplete its funds by 2026, down from last year's estimate of 2029.
Don't worry, that doesn't mean that Mom and Dad won't have any Social Security to rely on after 2034.
Medicare, the program that provides health care for older Americans and those who are disabled, is covered by two big trust funds. This is because premium income and general revenue income are reset each year to cover the expected rise in costs.
For Social Security, the last time the program ran an annual deficit was in 1982, before President Reagan signed changes that set it on firmer footing for the next 30 years.
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"The current trajectories in health spending are both unsustainable and unmatched by increases in quality", Alex M. Azar II, the secretary of health and human services and a trustee of Medicare and Social Security, said on Tuesday.
"Lackluster economic growth in previous years, coupled with an aging population, has contributed to the projected shortages for both Social Security and Medicare", Mr. Mnuchin said in a statement following the release of the trustees' report. About 23 percent of older married couples rely on Social Security as their main source of income, according to the program.
President Trump campaigned on a promise that he wouldn't cut Social Security or Medicare, but he hasn't offered a rescue plan for either program. That's the amount the Social Security's trustees said tax income alone could cover.
Democrats, meanwhile, want to extend the social safety net by spending more on health care and education. And the trustees now say that program is going to be insolvent in 2026 - or roughly the same time as we are from the passage of Obamacare.
In principle, the U.S.is supposed to be paying forward its Social Security and Medicare obligations by building up trust funds to cover future costs.
House Speaker Paul Ryan, R-Wis., has always been an advocate for overhauling the programs, introducing a voucher-like system for Medicare and calling for partially privatizing Social Security.