By Drew Armstrong and Brian Faler, Bloomberg BusinessWeek
Medicare, the U.S. health insurance program for the elderly and disabled, and the Social Security trust for the disabled and retirees are running out of money sooner than the government had projected.
While Medicare wonâ€™t have sufficient funds to pay full benefits starting in 2024, five years earlier than last yearâ€™s estimate, Social Securityâ€™s cash to pay full benefits runs short in 2036, a year sooner than the 2010 projection, the U.S. government said today in an annual report.
Both forecasts were affected by a slower-than-anticipated economic recovery, the government said. The estimates for funding add urgency to talks between Democrats and Republicans on ways to cut spending to reduce the U.S. budget deficit.
â€œProjected long-run program costs for both Medicare and Social Security are not sustainable under currently scheduled financing, and will require legislative corrections if disruptive consequences for beneficiaries and taxpayers are to be avoided,â€ according to the report summary.
The 2010 health-care overhaul backed by Democrats extended the life of Medicare, though a greater effort is needed to shore up the programâ€™s long-term funding, Treasury Secretary Timothy Geithner said in a statement distributed with the report.
â€œIf we do not do more to contain health-care costs, our commitments will become unsustainable,â€ said Geithner, managing trustee of Medicare and Social Security, in the statement.
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