Policy & oversight
Medicare Trustees Hold Part A Depletion Date at 2033 as Projected Part D Spending Accelerates
The 2026 Medicare Trustees Report projects the hospital insurance trust fund will exhaust its reserves in 2033, one quarter earlier than last year's estimate, and sees Part D drug spending nearly doubling by 2035.
By the Goodsurance editorial teamJuly 6, 2026
The 2026 Medicare Trustees Report, released June 9, 2026, projects the Medicare Part A hospital insurance trust fund will be depleted in 2033, one quarter earlier than the 2025 report estimated. Depletion would not stop Medicare payments immediately; incoming payroll tax revenues would continue to cover a portion of scheduled benefits. Parts B and D are funded through general revenues and enrollee premiums, which carry no comparable depletion risk.
The report projects Medicare Part D prescription drug spending will nearly double, rising from approximately 181 billion dollars in 2025 to roughly 346 billion dollars by 2035, an average annual growth rate of about 6.7 percent. The Inflation Reduction Act expanded Part D coverage in ways that are expected to increase total program spending, including by capping annual out-of-pocket costs for enrollees and reducing cost-sharing in the catastrophic coverage phase, even as newly negotiated drug prices apply to selected medications.
The Medicare hospital insurance fund is still projected to run short in 2033, one quarter earlier than last year, while Part D drug spending may nearly double by 2035.
CMS said the report reflects reduced cost growth on some measures compared to prior projections.
The Trustees publish this annual report each spring to give Congress and the public a current picture of Medicare's financial health. Any change to Medicare's financing requires an act of Congress; the report does not call for immediate benefit adjustments.
In plain words
Every year, Medicare leaders put out a report on how the program is doing with money. The 2026 report came out in June. It says the fund that pays for hospital care, called Part A, could run out of money in 2033. That is a little sooner than they thought last year. Running out of money does not mean Medicare stops. It means Medicare might have to cover less than the full bill for some care. The report also says spending on prescription drugs could almost double by 2035. This is partly because Medicare now covers more of the drug costs for its members. Congress would need to act to fix any funding gap before it happens.
Understand the basics first
Source: CMS
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