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Medicare Trustees Release Annual Report, Predict Depleted Hospitalization Trust Fund by 2026

On Tuesday, Medicare Trustees issued their 2018 report, which indicates that Medicare will become insolvent in 2026, three years earlier than last year’s prediction. According to the report, the Medicare Part A Trust Fund—which covers inpatient care in hospitals, nursing homes, skilled nursing facilities, and critical access hospitals—will only be able to cover 91% of hospital-related expenses through 2026.

According to the Trustees, payroll tax reductions and the repeal of the Affordable Care Act’s (ACA) individual mandate are partly to blame for the reduced forecast. Higher-than-expected healthcare spending in 2017, higher Medicare Advantage payments, and the repeal of the Independent Payment Advisory Board (IPAB) also contributed.

The report projects that both Medicare Part B (outpatient care) and Part D (prescription drug program) remain financially sound for the “indefinite future,” due to beneficiary premiums and general revenues.

Like last year’s projection, the report indicates that Social Security will become insolvent in 2034.