06/19/2025

Outlook for Social Security and Medicare Worsens, Raising Long-Term Concerns

The Social Security and Medicare Boards of Trustees released their annual reports on June 18, warning of earlier-than-expected depletion dates for both trust funds that support millions of older adults and individuals with disabilities.

The Social Security Trust Fund, which includes retirement and disability benefits, is now projected to become insolvent by 2034—one year earlier than previously forecast. At that point, the trust fund will be able to pay only 77% of scheduled benefits unless Congress acts.

This acceleration is attributed largely to the Social Security Fairness Act, signed into law on January 5, 2025, which repealed the Windfall Elimination Provision (WEP) and Government Pension Offset (GPO). These changes restored or increased benefits for nearly 3 million retirees and their spouses but also increased the long-term costs to the system.

Meanwhile, the Medicare Hospital Insurance (HI) Trust Fund, which supports inpatient hospital, skilled nursing, home health, and hospice care, is now expected to be depleted by 2033—three years earlier than projected last year. After that point, the fund will cover only 89% of scheduled payments. The updated forecast reflects higher-than-expected expenditures for hospital and hospice services in 2024, which covered a total of 67.6 million beneficiaries, including over 60 million older adults.

These projections serve as a stark reminder of the financial pressures facing programs critical to aging services providers and the individuals they serve.

LeadingAge will continue to monitor federal discussions around trust fund solvency and advocate for sustainable, long-term solutions that protect older adults and support the workforce and infrastructure required to care for them.