The recently-released Medicare trustees annual report on the state of the Medicare program currently projects sufficient funds into 2028, two years longer than last year’s estimate. At that point revenues would be able to cover 90 percent of Medicare outlays.
The Medicare Part A program is funded by the Hospital Insurance (HI) trust fund, by way of payroll taxes.
Despite the extended solvency, the trustees warned of long-term financing challenges stating. “Social Security and Medicare both face long-term financing shortfalls under currently scheduled benefits and financing,” wrote the trustees, adding that “current-law projections indicate that Medicare still faces a substantial financial shortfall that will need to be addressed with further legislation. Such legislation should be enacted sooner rather than later to minimize the impact on beneficiaries, providers, and taxpayers.”
As expected, COVID-19 had significant impact on the short-term financing of Medicare, but at this time the trustees do not expect it to hold negative long-term ramifications, likely attributable to vaccine and treatment availability.
For 2021 totals Medicare provided coverage for nearly 64 million people, 55.5 million of who are 65 or older and 8.3 million who are disabled.