America's Debt Challenge

Medicare funding runs short by 2024, trustees say

By Jeanne Sahadi@CNNMoney April 23, 2012: 2:28 PM ET

NEW YORK (CNNMoney) -- Highlighting the fiscal problems posed by growing health costs and an aging population, the trustees of Medicare estimated Monday that the program will be able to pay only a portion of promised benefits starting in 2024.

That's the same year the trustees had estimated last year.

Every year the Medicare trustees, who also oversee Social Security, release an annual report on both programs' long-term financial outlook.

In terms of Social Security, the trustees estimated that the program -- considering both old-age as well as disability benefits -- will be able to pay only a portion of promised benefits starting in 2033. That is three years' earlier than they predicted last year.

Social Security has already begun paying out more in benefits than it takes in from workers' payroll taxes.

But the difference has been made up for with interest paid by the Treasury Department on $2.6 trillion that the federal government owes the program. That debt represents the amount of extra revenue paid into the system over the years that Uncle Sam borrowed and spent.

"Pressures on these programs are mounting -- Americans are living longer and the number of retirees is growing," Treasury Secretary Tim Geithner said in a statement.

Medicare funding runs short by 2024, trustees say - Apr. 23, 2012