Medicare trust fund to run out by 2030, trustees say

The main trust fund that finances Medicare's hospital insurance coverage will run out in 2030, the program's trustees said in a report issued Wednesday, adding that while this is unchanged from last year's projection the long-term funding outlook has improved.

The trustees have previously projected that the hospital trust fund would run out by 2024 or by 2026.

This year's report estimates that per-enrollee Medicare spending growth will average 4.2 percent over the next decade, lower than the projected 5.1 percent overall growth of healthcare expenditures. This can partially be attributed to Affordable Care Act provisions that focus on containing costs, the report states.

Despite the encouraging signs, however, "we cannot be complacent as the number of Medicare beneficiaries continues to grow," Acting CMS Administrator Andy Slavitt said in a statement about the report, adding that policymakers therefore must continue to transform the healthcare system in order to reduce spending.

Yet as a recent policy brief from the Commonwealth Fund points out, because of the many changes Medicare has experienced, it is difficult to rely on financial forecasts when making policy decisions about the program.

The trustees also report that the average benefit per Medicare enrollee was $12,432 in 2014, which is about 2 percent higher than last year. Total income for the Medicare program last year was $599 billion, and its expenditures totaled $613 billion.

For 2015, the trustees "expect total Medicare expenditures to continue to exceed non-interest revenue," but by only a very small margin, the report states. The trustees also expect modest surpluses for 2016-2020, followed by a return to deficits in 2021 and beyond due to expenditures increasing faster than revenue.

To learn more:
- here's the report (.pdf)
- read the statement

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