The Medicare Board of Trustees June 22 released its annual report to Congress on the financial and actuarial status of the Hospital Insurance (HI) and Supplementary Medical Insurance (SMI) trust funds.
The report estimates that the HI trust fund will be depleted by 2028, which is two years earlier than in last year’s report. Similar to previous reports, the trustees determined the fund is not adequately financed over the next ten years.
According to the report, the SMI trust fund will remain in financial balance for all future years because beneficiary premiums and general revenue transfers will be set at a level to meet expected costs each year. However, SMI costs are projected to increase significantly as a share of the gross domestic product (GDP) over the next 75 years, from 2.1 percent to 3.8 percent due to the aging population and rising health care costs.
The report also includes an overview of the Medicare program from last year. In 2015, Medicare covered 55.3 million people and total expenditures were $647.6 billion. The trustees project expenditures will increase in most future years at a somewhat faster pace than the economy due to the number of beneficiaries increasing more rapidly than the number of workers, coupled with a continued increase in the volume and intensity of services delivered.