Medicare funding drying up much quicker than anticipated

Medicare beneficiaries are facing the prospects of dwindling funds much sooner than expected, a government report said today.

Instead of running out in 2029, Medicare funding to pay full benefits will be gone five years earlier in 2024 according to the annual report. Meanwhile, Social Security full benefits for retirees and the disabled will be cut off in 2036, one year sooner than originally projected.

The altered projections were the result of the recession and the slow recovery, and the report says immediate legislative measures are needed to correct them.

"Projected long-run program costs for both Medicare and Social Security are not sustainable under currently scheduled financing, and will require legislative corrections if disruptive consequences for beneficiaries and taxpayers are to be avoided," the report said.

If funds are cut short, Medicare will have to decrease payments to health care providers by 10 percent while Social Security will reduce payments by 23 percent.

Lawmakers are debating on whether or not to raise the $14.3 trillion debt limit by August 2. President Barack Obama had met with Senate Democrats and Republicans separately about steps to reduce the deficit.

Democrats do not want drastic changes made to Social Security since there is enough time while Republicans have proposed trimming the deficit by privatizing Medicare and offering subsidy to individuals to buy coverage from private health insurers.

"Leadership is required from both sides to ensure that Medicare and Social Security are saved for current seniors and strengthened to meet the need of future generations," Republican Representative and House Budget Committee Chairman Paul Ryan said.

Analysts say it is better for current beneficiaries that Medicare funding issues be addressed now than later because benefits will be cut more drastically if lawmakers take longer to make decisions.