Government and Regulations

Medicare Trust Fund projected to run dry in 2028


 

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The Medicare Trust Fund is projected to become insolvent in 2028, 2 years earlier than projected this time last year.

The change is based on two key factors: an expected reduction in payroll taxes and a slowdown in declining rate of inpatient utilization, Andy Slavitt, acting administrator of the Centers for Medicare & Medicaid Services said at a June 22 press conference to review the annual Medicare Trustees report.

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“The good news is inpatient utilization is still declining, it’s just declining at a slightly lower rate,” Mr. Slavitt said.

He also highlighted the continuing rising cost of prescription medications, which he called “a major driver” in Medicare spending growth.

“For the second year in a row, we saw spending growth for prescription drugs dramatically outpace cost growth for other Medicare services,” Mr. Slavitt said. “Through 2025, Medicare Part D expenditures per enrollee are estimated to increase nearly 50% higher than the estimated increase in GDP per capita and higher than the combined per enrollee growth rate of Medicare Part A and Medicare Part B combined.”

Overall, total Medicare expenditures “are slightly lower than estimated last year,” Mr. Slavitt said, adding that over the next decade, “Medicare per-enrollee spending is projected to continue to grow slower than historical rates, at 4.3%, lower than the growth in overall per capita national health expenditures.”

The growth rate is not projected to trigger the activation of the Independent Payment Advisory Board, according to the report.

In 2015, Medicare covered 55.3 million people, including 46.3 million aged 65 and older, and 9 million disabled individuals.

gtwachtman@frontlinemedcom.com

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