Question

1. What is the problem facing the Social Security Retirement program?
2. What is the problem facing the Medicare program?
3. What are some solutions for both programs?

Answer 1

a)  Many policy solutions exist for improving the financial outlook of social securitys retirement program including increasing payroll taxes , raising the full retirement age , reducing initial benefits , and adjusting benefits after retirement . proposals to put social security finances on a long term sustainable footing include

i) options to increase social securitys payroll tax revenues

Raise the payroll tax rate from its current level of 12.4% on wage earnings subjects to the tax.in 2018 earnings up to $128400 are taxed

ii) options to increase the retirement age and index it to increase in longevity

full retirement age varies ,it is currently 66 years and 4 months for those eligible to retire in 2018 and is slated to rise to 67 years old for those born in 1960 or later .some propose increasing the retirement age above age 67 for younger cohorts to account for future gains in average longevity

b) The federal Government has sponsored health insurance programs such as Medicare as well as the medicaid .Medical insurance for the elderly , disabled ,as well as low income Americans are covered by these insurance programs . In 1965 ,these programs took effect and the Health care Finance Administration or the HCFA ,of the department of Health and human services administered these programs .Health care coverage is provided by the US government to a variety of groups such as federal employees ,military personnel , veterans as well the native Americans .However ,the largest proportion of health care expenditure is accounted by the Medicare as well as Medicaid programs

From the above a and b we can determine some points

social security retirement and medicare are funded primarily through the collection of payroll taxes .Because of demographic and economic factors , fewer workers are paying into social security and Medicare than in the past ,resulting in decreasing income from the payroll tax .the strain on the trust funds is also worsening as large numbers of baby boomers reach retirement age,Americans live longer ,and health care costs rise.