Medicare is the federal health insurance program for people 65 years and over and for younger people with permanent disabilities. Have you ever wondered if there will be around if and when should you need it? Over the last few years, the financial status of Medicare ranged from stable to projections of insolvency. Each year, new projected insolvency dates are made based on numerous factors including payroll taxes, taxes on Social Security benefits, hospital spending, Medicare Advantage payments, population data, regulatory reform and much more. This year the general consensus of actuaries projects insolvency of the Hospital Insurance Trust Fund (which covers Part A of Medicare) by 2026. However, Medicare will not be bankrupt. Specifically, the projections are that when this trust fund is exhausted incoming payroll taxes and other revenue will cover 91% of benefits. These revenues will gradually decline to cover 78% of costs in 2042, and again gradually rise to 85% by 2092. Proposals have been made to account for the shortfall, either through raising revenues and/or slowing the growth in costs. While many economic factors can impact the date of insolvency either positively or negatively, we encourage you to be realistic in your financial planning for your future and to lead a healthy lifestyle to help reduce your need for expensive medical care.

ISSUE: What would you do if there were no Medicare?

AHHA strives to maintain a neutral position on issues and views knowledge as power. For those interested in learning more about this month’s issue, the following related articles were selected to serve as a foundation for learning more about this matter. If you need more statistics than those above pulled from the articles, read all of the articles carefully.

The Medicare Program Trustees Report & Trust Funds (6/5/18)
Centers for Medicare & Medicaid Services

The Facts on Medicare Spending and Financing (6/22/18)
by Juliette Cubanski and Tricia Neuman
Henry J Kaiser Family Foundation

Medicare trust fund to run out by 2026: 7 things to know (6/6/18)
by Emily Rappleye
Becker’s Hospital CFO Report

Medicare Is Not “Bankrupt (7/3/18)
by Paul N. Van De Water
Center on Budget and Policy Priorities

Medicare, Social Security running out of money faster than expected (6/5/18)
by Nolan Hicks
New York Post

Imagining a World without Medicare (1/3/18)
by Ann Harrington and Douglas Clement
Federal Reserve Bank of Minneapolis

We encourage you to post your comments. You are also invited to share additional resources you have found relating to this issue.