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Posts from the ‘Medicare’ Category

22
Jul

Social Security and Medicare 2025 Trustees Reports:  It’s Time to Address Funding Concerns

Each year, the Trustees of the Social Security and Medicare trust funds provide detailed reports to Congress that track the programs’ current financial condition and projected financial outlook. These reports have warned for years that the trust funds would be depleted in the not-too-distant future, and the most recent reports, released on June 18, 2025, show that Social Security and Medicare continue to face significant financial challenges.

The Trustees of both programs continue to urge Congress to address these financial shortfalls soon, so that solutions will be less drastic and may be implemented gradually. Americans agree — in a survey conducted last year,  87% of those polled said that Congress should act now to address Social Security’s funding shortfall, rather than waiting  years to find a solution.1

Despite the challenges, it’s important to keep in mind that neither of these programs is in danger of collapsing completely. The question is what changes will be required to rescue them.

More retirees and fewer workers

The fundamental problem facing both programs is the aging of the American population. Today’s workers pay taxes to fund benefits received by today’s retirees, and with lower birth rates and longer life spans, there are fewer workers paying into the programs and more retirees receiving benefits for a longer period. In 1960, there were 5.1 workers for each Social Security beneficiary;  in 2025, there are 2.7, a number that is projected to drop to 2.2 by 2045.

Dwindling trust funds

Payroll taxes from today’s workers, along with income taxes on Social Security benefits, go into interest-bearing trust funds. During times when payroll taxes and other income exceeded benefit payments, these funds built up reserve assets. But now the reserves are being depleted as they are used to supplement payroll taxes and other income to meet scheduled benefit payments.

Social Security outlook

Social Security consists of two programs, each with its own trust fund. Retired workers and their families and survivors receive monthly benefits under the Old-Age and Survivors Insurance (OASI) program; disabled workers and their families receive monthly benefits under the Disability Insurance (DI) program.

The OASI Trust Fund reserves are projected to be depleted in 2033, unchanged from last year’s report, at which time incoming revenue would pay only 77% of scheduled benefits. Reserves in the much smaller DI Trust Fund, which is on stronger footing, are not projected to be depleted during the 75-year period ending in 2099.

Under current law, these two trust funds cannot be combined, but the Trustees  also provide an estimate for the hypothetical combined program, referred to as OASDI. This would extend full benefits to 2034, a year earlier than last year’s report, at which time, incoming revenue would pay only 81% of scheduled benefits.

This year’s report states that the January 2025 enactment of the Social Security Fairness Act of 2023 is projected to have a substantial effect on Social Security’s financial status. This law repealed the Windfall Elimination Provision and Government Pension Offset, and consequently, increased Social Security benefits for some people who worked in jobs not covered by Social Security.

Medicare outlook

Medicare also has two trust funds. The Hospital Insurance (HI) Trust Fund pays for inpatient and hospital care under Medicare Part A. The Supplementary Medical Insurance (SMI) Trust Fund comprises two accounts: one for Medicare Part B physician and outpatient costs and the other for Medicare Part D prescription drug costs.

The HI Trust Fund will contain  surplus income through 2027 but is projected to be depleted in 2033, three years earlier than in last year’s report. At that time, revenue would pay only 89% of the program’s costs. Overall, projections of Medicare costs are highly uncertain.

The SMI Trust Fund accounts for Medicare Parts B and D are expected to have sufficient funding because they are automatically balanced through premiums and revenue from the federal government’s general fund, but financing will need to increase faster than the economy to cover expected expenditure growth.

Note: The One Big Beautiful Bill Act, signed into law on July 4, 2025, may impact the Social Security and Medicare programs by reducing the income taxes on Social Security benefits that flow into the OASI and HI trust funds. Although the law did not change the rules for taxing Social Security benefits, the new senior deduction ($6,000 for single filers, $12,000 for joint filers) is likely to reduce the number of people who pay taxes on their benefits and reduce the marginal tax rate for those who do pay taxes. One estimate suggests that this could move the expiration dates for the OASI and HI trust  funds up to 2032.2

Possible fixes

If Congress does not take action, Social Security beneficiaries might face a benefit cut after the trust funds are depleted, based on this year’s report. Any permanent fix to Social Security would likely require a combination of changes, including some of these.

  • Raise the Social Security payroll tax rate  (currently 12.4%, half paid by the employee and half by the employer). An immediate and permanent payroll tax increase to 16.05% would be necessary to address the long-range revenue shortfall (or to 16.67% if the increase started in 2034).
  • Raise the ceiling on wages subject to Social Security payroll taxes ($176,100 in 2025).
  • Raise the full retirement age (currently 67 for anyone born in 1960 or later).
  • Change the benefit calculation formula.
  • Use a different index to calculate the annual cost-of-living adjustment.
  • Tax a higher percentage of benefits for higher-income beneficiaries.

Addressing the Medicare shortfall might necessitate a combination of spending cuts, tax increases, and cost-cutting through program modifications.

Based on past changes to these programs, it’s likely that any future changes would primarily affect future beneficiaries and have a relatively small effect on those already receiving benefits. While neither Social Security nor Medicare is in danger of disappearing, it would be wise to maintain a strong retirement savings strategy to prepare for potential changes that may affect you in the future.

You can view a combined summary of the 2025 Social Security and Medicare Trustees Reports and a full copy of the Social Security report at ssa.gov. You can find the full Medicare report at cms.gov.

All projections are based on current conditions, subject to change, and may not happen.

1) National Institute on Retirement Security, 2024

2) Committee for a Responsible Federal Budget, June 27, 2025

 

22
Oct

Medicare Open Enrollment Kicks Off

Medicare’s Open Enrollment period began on October 15 and runs through December 7. If you are covered by Medicare, it’s time to compare your current coverage with other available options. Medicare plans can change every year, and you may want to switch to a health or prescription drug plan that better suits your needs or your budget.

During this period, you can:

  • Switch from Original Medicare to a Medicare Advantage Plan, and vice versa
  • Change from one Medicare Advantage Plan to a different Medicare Advantage Plan
  • Change from a Medicare Advantage Plan that offers prescription drug coverage to a Medicare Advantage Plan that doesn’t offer prescription drug coverage, and vice versa
  • Join a Medicare Part D drug plan, switch from one Part D plan to another, or drop your Part D coverage

Any changes made during Open Enrollment are effective as of January 1, 2025.

Original Medicare (Part A) hospital insurance and (Part B) medical insurance) is administered directly by the federal government and includes standardized premiums, deductibles, copays, and coinsurance costs.

A Medicare Advantage (Part C) Plan is an alternative to Original Medicare. Medicare Advantage Plans cover all Original Medicare services and often include prescription drug coverage and extra benefits. They are offered by private companies approved by Medicare. Premiums, deductibles, copays, and coinsurance costs vary by plan.

Medicare (Part D) drug plans, like Medicare Advantage Plans, are offered by private companies and help cover prescription drug costs.

Key  changes for 2025

  • Medicare Part D: As of January 1, all Medicare Part D  plans will  include an annual $2,000 cap on out-of-pocket on costs for  prescription drugs covered by the plan. No copayment or coinsurance costs for Part D drugs will apply for the rest of the year. In addition, enrollees can opt in to a Medicare Prescription Payment Plan to pay their out-of-pocket prescription drug costs monthly rather than all at once at the pharmacy.
  • Medicare Advantage: During the summer, Medicare Advantage Plans will  send out a  mid-year statement to enrollees that shows supplemental benefits available but unused and remind  enrollees how to  take advantage of them.
  • Original Medicare:  Starting in July, more caregivers of people with dementia who are not residing in a nursing home and are covered by Original Medicare may have access to a model program called Guiding an Improved Dementia Experience (GUIDE). This program, which initially rolled out in July 2024, provides a 24/7 support line, care coordination, referrals to community-based social services, caregiver training, and respite services. Although this program will be expanded in 2025, it won’t be available in all communities. Visit the CMS Innovation website at cms.gov to find out if a program is available in your area.

Compare your options

Start by reviewing any materials your plan has sent you. Look at the coverage offered, the costs, and the  network of  providers, which may be different than last year. Maybe your health has changed, or you anticipate needing medical care or new or pricier prescription drugs.

If your current plan doesn’t meet your healthcare needs or fit your budget, you can make changes. If you’re satisfied with what you currently have, you don’t have to do anything — your current coverage will continue.

If you’re interested in a Medicare Advantage Plan or a Medicare Part D drug plan, you can use the Medicare Plan Finder on medicare.gov to see which plans are available in your area and check their overall quality rating. For personalized information, you can log in or create an account to compare your plan to others and see prescription drug costs.

Get help

Determining what coverage you have now and comparing it to other Medicare plans can be confusing and complicated, but help is available. Call 1-800-MEDICARE or visit the Medicare website to use the Plan Finder and other tools that can make comparing plans easier. You can also call your State Health Insurance Assistance Program (SHIP) for free, personalized counseling. Visit shiphelp.org  to find the phone number and website address for your state.

12
Oct

Medicare Open Enrollment for 2022 Starts October 15

Medicare beneficiaries can make new choices and pick plans that work best for them during the annual Medicare Open Enrollment Period. Costs and coverage typically change annually. Changes in your healthcare needs over the past year also may have changed. The Open Enrollment Period — which begins on October 15 and runs through December 7 — is your opportunity to switch your current Medicare health and prescription drug plans to ones that better suit your needs.

During this period, you can:

  • Switch from Original Medicare to a Medicare Advantage Plan
  • Switch from a Medicare Advantage Plan to Original Medicare
  • Change from one Medicare Advantage Plan to a different Medicare Advantage Plan
  • Change from a Medicare Advantage Plan that offers prescription drug coverage to a Medicare Advantage Plan that doesn’t offer prescription drug coverage
  • Switch from a Medicare Advantage Plan that doesn’t offer prescription drug coverage to a Medicare Advantage Plan that does offer prescription drug coverage
  • Join a Medicare prescription drug plan (Part D)
  • Switch from one Part D plan to another Part D plan
  • Drop your Part D coverage altogether

Any changes made during Open Enrollment are effective as of January 1, 2022.

Review plan options

Now is a good time to review your current Medicare benefits to see if they’re still right for you. Are you satisfied with the coverage and level of care you’re receiving with your current plan? Are your premium costs or out-of-pocket expenses too high? Has your health changed? Do you anticipate needing medical care or treatment, or new or pricier prescription drugs?

If your current plan doesn’t meet your healthcare needs or fit your budget, you can switch to a new plan. If you find that you’re satisfied with your current Medicare plan and it’s still being offered, you don’t have to do anything. The coverage you have will continue.

Information on costs and benefits

The Centers for Medicare & Medicaid Services (CMS) has announced that the average monthly premium for Medicare Advantage plans will be $19, and the average monthly premium for Part D prescription drug coverage will be $33. CMS will announce 2022 premiums, deductibles, and coinsurance amounts for the Medicare Part A and Part B programs soon.

You can find more information on Medicare benefits in the Medicare & You 2022 Handbook on medicare.gov.

12
Oct

Medicare Open Enrollment for 2021 Begins October 15

The annual Medicare Open Enrollment Period is the time during which Medicare beneficiaries can make new choices and pick plans that work best for them. Each year, Medicare plan costs and coverage typically change. In addition, your health-care needs may have changed over the past year. The Open Enrollment Period — which begins on October 15 and runs through December 7 — is your opportunity to switch Medicare health and prescription drug plans to better suit your needs.

During this period, you can:

  • Join a Medicare prescription drug plan (Part D)
  • Switch from one Part D plan to another Part D plan
  • Drop your Part D coverage altogether
  • Switch from Original Medicare to a Medicare Advantage plan
  • Switch from a Medicare Advantage plan to Original Medicare
  • Change from one Medicare Advantage plan to a different Medicare Advantage plan
  • Change from a Medicare Advantage plan that offers prescription drug coverage to a Medicare Advantage plan that doesn’t offer prescription drug coverage
  • Switch from a Medicare Advantage plan that doesn’t offer prescription drug coverage to a Medicare Advantage plan that does offer prescription drug coverage

Any changes made during Open Enrollment are effective as of January 1, 2021.

Review plan options

Now is a good time to review your current Medicare plan to see if it’s still right for you. Have you been satisfied with the coverage and level of care you’re receiving with your current plan? Are your premium costs or out-of-pocket expenses too high? Has your health changed? Do you anticipate needing medical care or treatment, or new or pricier prescription drugs?

If your current plan doesn’t meet your health-care needs or fit within your budget, you can switch to a new plan. If you find that you’re satisfied with your current Medicare plan and it’s still being offered, you don’t have to do anything. The coverage you have will continue.

Medicare Part B (hospital insurance) premium and deductible costs capped for 2021

A provision of the short-term government spending bill recently passed by Congress and signed by President Trump limits potential Medicare Part B premium and deductible increases to 25% of what they would otherwise be. In April, the Medicare Trustees projected a 6% increase in the standard Medicare Part B premium, but stated that this projection was uncertain. Most Medicare costs for the following year are typically announced in late October or early November, so actual Medicare Part B costs for 2021 will not be available until then.

New and expanded benefits for 2021

Expansion of telehealth services. Medicare Advantage plans may now cover a wider range of telehealth and other virtual services, including virtual check-ins and E-visits that allow you to talk with your doctor or other health-care providers using an online patient portal.

Medicare Advantage for beneficiaries with End-Stage Renal Disease (ESRD). Medicare-eligible individuals with ESRD are eligible to enroll in a Medicare Advantage plan during Open Enrollment. Plan coverage will start January 1, 2021.

Acupuncture coverage for back pain. Medicare now covers up to 12 acupuncture visits in 90 days for chronic low back pain.

Lower out-of-pocket costs for insulin. You may be able to join a drug plan that offers supplemental benefits for insulin (Part D Senior Savings Model). The copay for a 30-day supply of insulin will be $35 or less. Coverage will begin on January 1, 2021.

You can find more information on new and expanded benefits in the Medicare & You 2021 Handbook on medicare.gov.

Where can you get more information?

Determining what coverage you have now and comparing it to other Medicare plans can be confusing and complicated. Pay attention to notices you receive from Medicare and from your plan, and take advantage of available help. You can call 1-800-MEDICARE or visit the Medicare website, medicare.gov, to use the Plan Finder and other tools that can make comparing plans easier.

You can also call your State Health Insurance Assistance Program (SHIP) for free, personalized counseling at no cost to you. Visit shiptacenter.org or call the toll-free Medicare number to find the phone number for your state.