By Alex Moore
The Medicare Hospital Insurance Trust Fund (HI Fund) pays out all Medicare Part A benefits, such as inpatient hospital services, skilled nursing facilities, home health care, and hospice care. As recently as 2025, the government estimated the fund would have enough funds to cover all Medicare Part A services through 2052, but according to an analysis from the non-partisan Congressional Budget Office, that figure has now moved up to 2040.
Why Did the HI Trust Fund’s Projected Expiration Jump So Far Forward?
According to the Congressional Budget Office, the shrinking timeline for the HI Fund’s insolvency comes down to three factors:
- The One Big Beautiful Bill Act. This law, passed in July 2025, lowered Americans’ tax rates and created a temporary tax deduction for taxpayers over the age of 65. This will result in a reduction in government revenues.
- Lagging Wages. The Congressional Budget Office decreased how much it expects to bring in via payroll taxes because it projects Americans will earn less in the future than it previously anticipated. In other words, slowing economic growth could hurt the HI Fund.
- Less Principal Means Less Interest. In 2026, the HI Fund contains less money than the Congressional Budget Office previously expected, which will result in lower interest payments on the money it holds. Because of how compounding interest works, this will result in lower interest payments in future years, too, unless Congress appropriates additional resources to the HI Fund.
What Would Happen if the HI Fund Reached Insolvency?
According to the Healthcare Financial Managers Association (HSMA), Medicare’s payments to healthcare providers would decrease by 11 percent. Medicare would pay less for the same services.
That doesn’t sound bad until you consider the consequences. A memo from the Centers for Medicare and Medicaid Services says that “providers could not sustain continuing negative margins and would have to withdraw from serving Medicare beneficiaries” or raise healthcare costs on younger people. Healthcare providers would face a difficult decision between no longer serving Medicare patients and raising costs on other Americans, who are already unhappy with what they pay for healthcare.
How Can We Save the HI Fund?
Just as with Social Security’s insolvency, we need to push Congress to act sooner rather than later. Either taxes need to increase to cover the program’s shortfalls, or the money needs to come from somewhere else in the government’s budget. Just like you, we at TSCL know that Americans can’t compromise when it comes to protecting their Medicare benefits.