We use cookies to provide some features and experiences in QOSHE

More information  .  Close
Aa Aa Aa
- A +

Big Changes Likely for Social Security, Medicare Under a Biden Presidency

3 2 55

Getty Images

When President-Elect Joe Biden takes office next year, sooner or later he and Congress will need to confront the third rail of politics -- the twin safety nets that Social Security and Medicare provide, both of which have been fraying for some time.

Funding shortfalls or outright insolvency loom for the retirement programs as demand grows from an aging population. A deadly pandemic and struggling economy have only accelerated fiscal and demographic pressures.

In 2021, Social Security is expected to begin drawing down its trust fund to cover benefits instead of tapping only the interest. Unless Congress acts, Social Security beneficiaries can expect at least a 20% cut in benefits when the trust fund runs out in 2033 – thanks to the pandemic, two years sooner than previously projected -- according to the Center for Retirement Research at Boston College.

Medicare’s situation is more dire: The Congressional Budget Office predicts the Hospital Insurance Trust Fund, which pays for traditional Medicare’s Part A, will run out of money in 2024, two years ahead of schedule. If the Supreme Court overturns the Affordable Care Act, which helped extend Medicare’s fiscal life, the program would become insolvent almost immediately, according to the Senior Citizens League, a nonpartisan senior advocacy group in Alexandria, Va. The court will hear the case this month, with a ruling expected next year.

Biden has offered specific ideas for expanding and shoring up both programs. Whether those plans will see the light of day may depend on which party controls the Senate after Georgia’s two runoff elections.

The fixes to both........

© Kiplinger

Get it on Google Play