Trustees Say Pandemic Could Deplete Medicare Funds Sooner Than 2026

The Medicare Board of Trustees in its 2020 annual report projected that Medicare’s hospital insurance (HI) trust, which funds Part A payments, will be depleted by 2026, the same time frame the board pointed to in its previous two reports. According to the trustees, the HI fund will continue to deplete as long as the number of Medicare-eligible seniors outpaces the number of working adults, all while the “volume and intensity” of services and price per service continue to increase. But the board noted that it cannot yet adjust its estimates to account for the unprecedented impact of the COVID-19 pandemic. The trustees explained that the outlook could be worse than the report’s high-cost scenario, which forecasts the HI fund running out in 2023 (see chart below). Though the largest source of Part A spending is inpatient hospital services ($147.3 billion), payments to private health plans for providing Part A services grew 17% to $119.1 billion from 2018 to 2019. The trustees said they expect 33.1 million people will be enrolled in Medicare Advantage by 2029, representing a 43% penetration rate. The graphics below show highlights of the 2020 report.

© 2021 MMIT

Carina Belles

Carina is a reporter at AIS, specializing in public sector data research, trend analysis and infographics. She holds a Bachelor of Science in Journalism from Ohio University, joining AIS shortly after graduating in 2014.

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