Social Security Releases 2021 Trustees’ Report

Posted September 3, 2021 by Premier Disability Services, LLC®

Each year the Trustees of the Social Security and Medicare trust funds report on the current and projected financial status of the two programs. The reports include extensive information about the current operations of these important social insurance programs and careful analysis of their outlook. The purpose of the reports is to present the current and projected financial condition of the programs.

Social Security and Medicare both face long-term financing shortfalls under currently scheduled benefits and financing. Both programs will experience cost growth substantially in excess of GDP growth through the mid-2030s due to rapid population aging. Medicare also sees its share of GDP grow through the late 2070s due to projected increases in the volume and intensity of services provided.

The data and projections presented include the Trustees’ best estimates of the effects of the COVID-19 pandemic and the 2020 recession, which were not reflected in last year’s reports. The finances of both programs have been significantly affected by the pandemic and the recession of 2020. Employment, earnings, interest rates, and GDP dropped substantially in the second calendar quarter of 2020 and are assumed to rise gradually thereafter toward full recovery by 2023. In addition, the Trustees also project elevated mortality rates related to the pandemic through 2023 as well as reductions in immigration and childbearing in 2021-22 from the levels projected in the 2020 reports, with compensating increases a few years later. These alterations to near-term data and assumptions all significantly impact the outlook of the programs.

Given the unprecedented level of uncertainty, the Trustees currently assume that the pandemic will have no net effect on the individual long-range ultimate assumptions. At this time, there is no consensus on what the lasting effects of the COVID-19 pandemic on the long-term experience might be, if any. The Trustees will continue to monitor developments and modify the projections in later reports.

Based on the Trustees’ best estimates, the 2021 reports show:

  • The Old-Age and Survivors Insurance (OASI) Trust Fund, which pays retirement and survivors benefits, will be able to pay scheduled benefits on a timely basis until 2033, one year earlier than reported last year. At that time, the fund’s reserves will become depleted and continuing tax income will be sufficient to pay 76 percent of scheduled benefits.
  • The Disability Insurance (DI) Trust Fund, which pays disability benefits, will be able to pay scheduled benefits until 2057, 8 years earlier than in last year’s report. At that time, the fund’s reserves will become depleted and continuing tax income will be sufficient to pay 91 percent of scheduled benefits.
  • The Hospital Insurance (HI) Trust Fund, or Medicare Part A, which helps pay for services such as inpatient hospital care, will be able to pay scheduled benefits until 2026, the same year as reported last year. At that time, the fund’s reserves will become depleted and continuing total program income will be sufficient to pay 91 percent of total scheduled benefits.
  • The Trustees are including in the report for the fifth consecutive year a determination of projected excess general revenue Medicare funding, as is required by law whenever annual tax and premium revenues of the combined Medicare funds will be below 55 percent of projected combined annual outlays within the next seven fiscal years. Under the law, two consecutive such determinations, as is the case again this year, constitute a “Medicare funding warning.” Under current law and the Trustees’ projections, such determinations and warnings will recur every year through the long-range projection period.

One of our staff writers recently had an article publishes outlining several proposed reforms to Social Security, including a bill that would create targeted “rescue committees” to address the solvency of the Social Security trust fund. (Read her article here: https://www.disabilitysecrets.com/resources/social-security-disability-reforms.html) 

Read more about the Trustees’ Report here: https://www.ssa.gov/oact/trsum/ ; https://www.cms.gov/files/document/2021-medicare-trustees-report.pdf

Contact our office today if you or anyone you know would like to learn more about qualifying for Social Security Disability benefits.

By: Devon Brady of Premier Disability Services, LLC®