Reports Show Continued Deterioration of Social Security, Medicare Finances

The 2018 Trustees’ reports for the government’s largest entitlement programs show that their long-term financial stability remains in doubt.

The latest Trustees’ reports for Social Security and Medicare show that the programs remain on shaky financial ground with respect to their long-term viability.

Social Security

According to the 2018 Social Security Trustees Report, combined asset reserves of the Old-Age and Survivors Insurance and Disability Insurance (OASDI) Trust Funds are projected to become depleted in 2034, the same as projected last year, with 79 percent of benefits payable at that time.

The report notes:

Under the Trustees’ intermediate assumptions, Social Security’s total cost is projected to exceed its total income in 2018 for the first time since 1982, and remain higher throughout the projection period. Social Security’s cost has exceeded its non-interest income since 2010. For 2018, cost for the program is projected to exceed total income by $2 billion and non-interest income by $85 billion. As a result, asset reserves will decline during 2018. Reserves are also projected to decline throughout the remainder of the short-range period.


On the Medicare side, the 2018 Trustees’ report says that Medicare will become insolvent by 2026, three years earlier than previously projected.

Medicare Part B

One aspect of Medicare that is frequently of interest to federal employees is Medicare Part B since it can be used in conjunction with the Federal Employees Health Benefits Program (FEHB).

Regarding Medicare Part B, the report states:

The SMI trust fund [Supplementary Medical Insurance Trust Fund] is expected to be adequately financed over the next 10 years and beyond because premium income and general revenue income for Parts B and D are reset each year to cover expected costs and ensure a reserve for Part B contingencies. The Part B premium for 2018 is $134.00, the same as for 2017. However, a hold-harmless provision limited the premium increase in 2016 and 2017 for about 70 percent of enrollees. These Part B enrollees saw an increase in their Part B premium from about $109 in 2017, on average, to about $130, on average, in 2018. (See sections II.F and III.C for further details.)

Part B and Part D costs have averaged annual growth of 5.5 percent and 8.5 percent, respectively, over the last 5 years, as compared to growth of 3.7 percent for GDP. Under current law, the Trustees project an average annual Part B growth rate of 8.2 percent over the next 5 years; for Part D, the estimated average annual increase in expenditures for these 5 years is 6.0 percent. The projected average annual rate of growth for the U.S. economy is 4.7 percent during this period, significantly slower than for Part B and Part D.

About the Author

Ian Smith is one of the co-founders of He has over 20 years of combined experience in media and government services, having worked at two government contracting firms and an online news and web development company prior to his current role at FedSmith.