On February 2, 2022, the Senate Finance Committee’s Subcommittee on Fiscal Responsibility and Economic Growth held a hearing entitled “The Hospital Insurance Trust Fund and the Future of Medicare Financing” (for a link to a recording of the hearing, see here).
The annual release of the Medicare Trustees report – which projects the fiscal health of the Medicare program and focuses on the Part A Trust Fund – often serves as an impetus for calling for Medicare changes and cuts. The latest report, released in August 2021, projects that the Part A Trust Fund will be depleted by 2026 – unchanged from the previous projection, despite the impact of the COVID-19 pandemic.
As the Center periodically notes, even if the Trust Fund were to be depleted as projected, the program would still be able to pay out approximately 90% of Medicare Part A benefits. While not ideal, this is far from “bankruptcy.” Further, the date of projected insolvency is an estimate, and could easily change again – as it has many times before.
Medicare’s fiscal solvency can be strengthened through various means. In a Statement for the Record submitted to the Committee concerning the hearing, the Center included an excerpt from a May 2021 issue brief written by Center for Medicare Advocacy Visiting Scholar Marilyn Moon that examines how Medicare has operated over time, how well it is doing at present, and what changes have been used in the past to keep the program financially strong. The excerpt outlines potential short-term and long-term funding solutions through raising additional revenues. The submitted statement also focuses on one simple option for reducing programmatic spending – addressing ongoing Medicare Advantage overpayments.
January 3, 2022 – D. Lipschutz