On June 5, 2018, the Medicare Boards of Trustees (the Board) released its annual report on the fiscal condition of the Medicare trust funds: the Hospital Insurance (HI) trust fund, which supports Medicare Part A, and the Supplementary Medical Insurance (SMI) trust fund, which supports Medicare Parts B and D. The Board reports annually to Congress on the financial operations of, among other things, the HI and SMI trust funds. The Board has determined that the HI trust fund is not adequately financed over the next 10 years. Specifically, the Board projects that the HI trust fund will pay full scheduled benefits only until 2026, which is three years earlier than projected in last year’s Board report.

The Board explains that the changed projection for the HI trust fund is attributable to lower projected program income due to lower payroll taxes, as well as higher HI expenditure projections. The Board concludes that the SMI trust fund “remains adequately financed into the future due to financing being derived from general revenues and beneficiary premiums.”

The Board recommends that Congress and the executive branch work together “with a sense of urgency” to address the depletion of the HI trust fund.

Click here to view the 2018 Board report.