Medicare Trustees project trust fund solvent until 2026

The Medicare Hospital Insurance Trust Fund will have sufficient funds to pay full benefits until 2026, according to the latest annual report from the Medicare Board of Trustees. That’s unchanged from last year’s report, which projected that the Medicare trust fund would become insolvent three years earlier than they previously expected – in part because of less than anticipated revenue. The HI Fund, known as Medicare Part A, helps pay for inpatient hospital services, hospice care, and skilled nursing facility and home health services following hospital stays. The report projects that Medicare expenditures will grow from 3.7 percent of gross domestic product in 2018 to 6.5 percent by 2093, due to faster growth in the Medicare population and increases in the volume and intensity of health care services. The Supplementary Medical Insurance Trust Fund, which helps pay for physician, outpatient hospital, home health, and others services for beneficiaries enrolled in Medicare Part B and prescription drug coverage under Part D, is expected to be adequately financed because income from premiums and general revenue are reset each year to cover expected costs.
 
AHA President and CEO Rick Pollack said, “America’s hospitals and health systems remain concerned by the Medicare Trustees Report’s projection that the hospital trust fund will be depleted by 2026 due in part to more people needing care as over 10,000 Baby Boomers turn 65 every single day. The life of the trust fund is influenced by a variety of economic factors as well.   

“It is important to note these estimates only address Part A of the Medicare program, which has become a smaller proportion of overall Medicare spending as the delivery system changes. Given that the projection remains unchanged from a year ago, we continue to urge Congress to shore up the long-term viability of the trust fund. Solutions to address this problem must include tackling the skyrocketing costs of drugs for hospitals, which will continue to grow at an increasingly fast rate in coming years. Policymakers should also consider structural reforms to the program that will have a real long-term impact, such as additional means testing for higher income beneficiaries, raising eligibility age to be consistent with the Social Security program, phasing in adjustments to the FICA contributions that fund the program, reducing regulatory burden and accelerating delivery system reforms that better coordinate care, especially for the chronically ill. 

“Hospitals and health systems have been working to keep cost growth down while simultaneously providing the best quality health care for all patients. We stand ready to work with policymakers and other stakeholders to continue to ensure Medicare is there for future generations.”