Medicare Trust Fund Shows Little Change, Sustainability Must Be the Focus
On Tuesday, the Medicare Boards of Trustees released their mandatory annual report on the financial status of Medicare’s trust funds. Like last year’s findings, the trustees project that the Hospital Insurance (HI) trust fund would be partially depleted in 2033. Partial depletion means the income to the program would be sufficient to pay for 89% of Part A benefits.
How Medicare Is Funded
There are two different Medicare trust funds: the HI fund and the Supplemental Medical Insurance (SMI) fund.
The HI trust fund finances Medicare Part A, which covers inpatient hospital care, hospice, skilled nursing facilities, and home health services following a qualifying hospital stay. The fund gets its money primarily through the Medicare payroll tax, which means improved employment and wages benefit the HI trust fund.
The Supplemental Medical Insurance (SMI) trust fund covers Part B (outpatient care) and some of Part D (drug coverage). The SMI trust fund gets its financing through a combination of premiums and general revenue amounts that change each year to account for projected spending. This financing means the SMI fund does not rely on payroll taxes and is not as constrained in its funding.
https://www.medicarerights.org/medicare-watch/2026/06/11/medicare-trust-fund-shows-little-change-sustainability-must-be-the-focus