Medicare Advantage spending flagged as hospital fund depletion moves up: 4 notes

The Hospital Insurance Trust Fund is estimated to pay full Medicare Part A benefits only through the second quarter of 2033, one quarter earlier than last year’s projection of the third quarter, according to the 2026 Social Security and Medicare Trustees Report published June 9.

Part A covers inpatient, skilled nursing, home health and hospice care services.

Four things to know:

1. At depletion, the program would cover 89% of scheduled Part A benefits, falling to 85% by 2050 before recovering to 93% by 2100. The fund had $255.7 billion in reserves at the end of 2025, and annual fund deficits are projected to return in 2027.
2. The trustees tied the worsening outlook in part to upward revisions in Medicare Advantage per capita spending, higher utilization and lower projected tax revenue from Social Security benefits following enactment of H.R. 1. The fund’s 75-year actuarial deficit widened to 0.56% of taxable payroll, up from 0.42% last year.
3. The fund’s projected depletion date first moved to 2033 last year, pulled forward from a prior 2036 estimate.
4. The trustees project Part D costs to be significantly higher than last year in every year of the projection, citing a 2025 surge in “certain specialty” drug usage, higher cost trends and lower rebates. The Supplementary Medical Insurance fund covering Parts B and D remains adequately financed indefinitely because premiums and federal contributions reset annually.

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