Actuarial Status of the Social Security and Medicare Programs

l The Federal Supplementary Medical Insurance (SMI) Trust Fund is financed on a year-by-year basis and is adequately financed. The Trustees urge the Congress to take additional actions designed to control SMI costs through specific program legislation and as a part of enacting comprehensive health care reform. The Boards of Trustees of the four trust funds issued a joint summary of their 1993 annual reports to Congress. This article is adapted from the joint summary and from the more detailed annual reports.’ It is organized into three sections: first, general information on the trust funds (how they are financed, administrative expenses, their status in 1992, and their short-range and long-range outlooks); next, the conclusions of the Trustees (including the conclusions from the more detailed annual reports); and then, a message from the Public Trustees. The Annual Reports of the Boards of Trustees detail the operations of the two Social Security Trust Funds and the two Medicare Trust Funds. The Social Security Trust Funds are the Federal Old-Age and Survivors Insurance (OASI) Trust Fund, which pays retirement and survivors benefits, and the Federal Disability Insurance (DI) Trust Fund, which pays benefits after a worker becomes disabled. The Medicare Trust Funds are the Federal Hospital Insurance (HI) Trust Fund, which pays for hospital and related care (“Part A”) for persons aged 65 or older and workers who are disabled, and the Federal Supplementary Medical Insurance (SMI) Trust Fund, which pays for physician and outpatient services (“Part B”) for persons aged 65 or older and workers who are disabled. When both OASI and DI are considered together, they are called the OASDI program. Because OASI and DI are both financed by payroll taxes and income taxes on benefits, the OASI and DI Trust Funds are often combined for the purpose of evaluating the overall actuarial status of the OASDI program. The Medicare Trust Funds are not usually considered together because they are funded differently.