Medicare Fund Projected to Fall Short in 2026 — 3 Years Earlier Than Expected

The fund that pays hospital bills for Medicare’s 60 million beneficiaries will fall short in 2026 — three years earlier than last year’s projection — while Social Security’s full solvency until 2034 remains unchanged, according to the trustees’ reports for the nation’s two largest federal programs released on Tuesday.

Last year the trustees said that the Medicare hospital fund would not have enough money by 2029. This year’s report attributes its bleaker projection to lower-than-expected income in the Medicare fund and higher-than-predicted spending. The fund gets most of its revenue from the Medicare taxes deducted from workers’ paychecks. In 2017, wages were lower than projected, the report says, and that meant the fund received less payroll tax income.  

“The financial projections in this report indicate a need for substantial steps to address Medicare’s remaining financial challenges,” the trustees wrote, and they urged Congress to take quick action. “Such legislation should be enacted sooner rather than later to minimize the impact on beneficiaries, providers, and taxpayers.” The trustees recommended that Congress and the executive branch "work closely together with a sense of urgency."