Medicare program unable to pay full benefits in 7 years, report finds

June 10, 2026 - 22:34

A new government report reveals that Medicare's hospital insurance trust fund will run short of money within seven years, leaving the program unable to pay full benefits for inpatient care. The fund, which covers Part A services such as hospital stays, skilled nursing facility care, and some home health services, is projected to become insolvent after the second quarter of 2033.

At that point, the program would only have enough revenue to cover about 89% of expected costs, according to the latest annual report from the Medicare trustees. The shortfall stems from a combination of rising healthcare costs, an aging population, and a shrinking ratio of workers paying payroll taxes to beneficiaries drawing benefits.

While the 2033 insolvency date is slightly later than last year's projection, it still underscores the long-term financial strain on the program. The trustees also noted that the Social Security trust funds face similar pressures, with the combined Old-Age and Survivors Insurance fund expected to be depleted by 2033 as well.

Lawmakers have long debated potential fixes, including raising the payroll tax, increasing the eligibility age, or reducing benefits. However, no major legislative action has been taken in recent years. Without changes, beneficiaries could face automatic cuts to hospital coverage once the trust fund runs dry.