Medicare Hospital Insurance Trust Fund

Insolvent by: 2026

Projected program cut: 9%

The Countdown

Our major federal trust funds are approaching insolvency.

What is the Medicare Hospital Insurance Trust Fund?

Medicare, a federal health insurance program, provides coverage primarily to people aged 65 and older. Its Hospital Insurance trust fund finances just Medicare Part A, which covers inpatient care in hospitals. Its revenue comes primarily from a 2.9% payroll tax, paid equally by workers and employers.  

Medicare Part B, which covers outpatient care, and Medicare Part D, which covers prescription drugs, are financed through a different federal trust fund funded mainly by beneficiary premiums and general revenue from the federal government. Though their costs are high and rising, they don’t face the same type of solvency challenges.

Elderly couple speaking with a doctor

Why is it in trouble?

Health care costs are rising, and the population is aging. This means more people are becoming eligible for Medicare, their benefits are becoming more costly, and there are less people in the workforce paying the taxes that support those benefits.

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What can we do to ensure Medicare trust fund solvency?

We need to reduce health care costs, change benefit design, increase payroll tax revenue and/or identify new sources of revenue for the trust fund.

Elderly couple sitting on a park bench

Get Into the Weeds

Ten Options to Secure the Medicare Trust Fund

The Medicare Hospital Insurance (HI), or Part A, trust fund is expected to be only five years from insolvency and faces a large funding gap over the next decade. Trust fund solutions are needed to bring the program’s dedicated revenue and spending in line. 

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A Deeper Dive

Highway Trust Fund

Insolvent by: 2027

Projected spending cut: 48%

Read more

Social Security Old-Age & Survivors Trust Fund

Insolvent by: 2033

Projected benefit cut: 24%

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Social Security Disability Trust Fund

Insolvent by: 2057

Projected benefit cut: 9%

Read more

What Can I do?

Reach Out to Congress

We need Congress to fix these tough issues before our seniors, our economy, and future generations are in jeopardy. Find your representative and share your concerns.

Share with Friends

These federal trust fund issues affect us all—whether we’re just starting out or nearing retirement. Get the word out. 

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