It happens like clockwork each year. The trustees of Social Security and Medicare issue their annual reports on the programs’ health, and doomsayers start talking about insolvency and bankruptcy.
This year is no exception. The reports issued on Tuesday yielded wildly inaccurate news stories – amplified by the social media echo chamber – suggesting that Medicare and Social Security are headed for insolvency in the not-too-distant future – meaning that they would not be able to pay out the money owed for benefits.
It is true that Social Security and Medicare face financial challenges. But neither is headed for insolvency, bankruptcy or other dire futures. How do I know this? By taking a careful look at the trustee reports – and by considering the various parts of both programs, which have different funding sources and face different challenges.