Where is Medicare headed?

Medicare costs are steadily increasing, funding is inadequate for the hospital trust fund – Part B costs continue to escalate. What more is there to say – we’ve been saying the same things for years and still no action by Congress.

Total Medicare expenditures were $839 billion in 2021. The Board estimates that the COVID-19 pandemic has had significant effects on the short-term financing and spending of the Medicare program, but the financial status of the trust funds has not materially changed. The Trustees project that expenditures will increase in future years at a faster pace than either aggregate workers’ earnings or the economy overall and that, as a percentage of GDP, spending will increase from 3.9 percent in 2021 to 6.5 percent by 2096 (based on the Trustees’ intermediate set of assumptions). Under the relatively higher price increases for physicians and other health services assumed for the illustrative alternative projection, Medicare spending would represent roughly 8.6 percent of GDP in 2096. Growth under either of these scenarios would substantially increase the strain on the nation’s workers, the economy, Medicare beneficiaries, and the Federal budget.



The Trustees project that HI tax income and other dedicated revenues will fall short of HI incurred expenditures in all future years. (There are surpluses in 2022 and 2023, on a cash basis, attributable to repayments of the Accelerated and Advance Payments Program.) The HI trust fund does not meet either the Trustees’ test of short-range financial adequacy or their test of long-range close actuarial balance.

The Part B and Part D accounts in the SMI trust fund are expected to be adequately financed because income from premiums and general revenue are reset each year to cover expected costs. Such financing, however, would have to increase faster than the economy to cover expected expenditure growth.

The financial projections in this report indicate a need for substantial changes to address Medicare’s financial challenges. The sooner solutions are enacted, the more flexible and gradual they can be. The early introduction of reforms increases the time available for affected individuals and organizations—including health care providers, beneficiaries, and taxpayers—to adjust their expectations and behavior. The Trustees recommend that Congress and the executive branch work closely together with a sense of urgency to address these challenges.

Table V.E2 displays the SMI cost-sharing and premium amounts for Parts B and D. The projected values for future years are based on the intermediate set of assumptions used in estimating the operations of the Part B and Part D accounts. As a result, these values are estimates, and the actual amounts are likely to be somewhat different as experience emerges. The Part B premiums for 2010 and 2011 also reflect significant additional increases designed to offset the loss of revenues attributable to the hold-harmless provision, as described later in this appendix. Similarly, the 2017 premium was increased due to loss of revenues from the very low Social Security cost-of-living adjustment and the hold-harmless provision.



  1. No comment about the lack of premium increase for 2023?
    The media keeps reporting about Social Security shortfall more than 10 years away and ignores Medicare shortfall much much sooner. The majority of Americans react (not proactive) to the media – very little thinking. While our elected officials say and do things that will get them re-elected, instead of acting in the best interest of the country. No wonder we are such a messed up country – our priorities are screwed up.


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