Two graphs show the looming financial crisis for the Medicare Part A Hospital Insurance trust fund and the Social Security Old-Age and Survivors Insurance trust fund.
"The Medicare Trustees project the Medicare Part A Hospital Insurance (HI) trust fund will run out of reserves in only five years, by 2026. Upon insolvency, Medicare Part A spending must be cut by 9 percent, with those cuts growing to 22 percent by 2045."
"The Social Security Trustees, meanwhile, project the Social Security Old-Age and Survivors Insurance (OASI) trust fund will deplete its reserves by 2033 and the Social Security Disability Insurance (SSDI) trust fund by 2057. The theoretically combined trust funds will exhaust their reserves by 2034 ... Upon insolvency, all beneficiaries will face a 22 percent across-the-board benefit cut, growing to 26 percent by 2095."
The report does not address Medicare Parts B, C, and D.
The report doesn't say what "insolvency" exactly means. The first quote above strongly suggests it is when the "reserve" is depleted. The "reserve" is an accounting gimmick. It is the result of the fund's dedicated revenues exceeding benefits paid in prior years. The "reserve" is merely IOUs from the U.S. Treasury. The federal government did not save the excesses, but spent them on other government programs. When benefits exceed dedicated revenues after the "reserve" is depleted, the excess will be paid from general revenues (income taxes, etc.) and/or by the federal government incurring more debt (by selling new U.S. Treasury securities).The benefit cuts the article describes is based on existing law. Of course, Congress can change the law before then, and Congress could cut benefits by non-uniform percentages. It could cut higher income benefits by greater percentages than lower income benefits.