Costs & IRMAA
Medicare's Hospital Fund Is Projected to Fall Short of Full Payment Capacity by 2033, Trustees Report Finds
The 2026 Medicare Trustees Report projects the Part A Hospital Insurance fund will be partially depleted in 2033, at which point incoming revenues would cover only 89 percent of covered costs, absent new legislation.
By the Goodsurance editorial teamOctober 26, 2026
Every year, the trustees who oversee Medicare's funding publish a required report to Congress on the financial health of the program's two trust funds. The 2026 edition, released June 9, projects that the Hospital Insurance fund, which finances Medicare Part A benefits covering inpatient hospital stays, skilled nursing facility care, hospice, and some home health services, will reach a point of partial depletion in 2033.
Under current law, partial depletion does not mean benefits would stop. It means the fund's reserves are projected to reach zero by 2033, leaving only incoming payroll taxes and other dedicated revenues to pay claims. At that point, those revenues would cover an estimated 89 percent of scheduled Part A costs, and the remaining gap would require new legislation to close.
Medicare's Part A trust fund is projected to cover only 89 percent of hospital costs by 2033 without new legislation, the official 2026 Trustees Report finds.
The 2026 projection worsened modestly from the prior year's outlook. The trustees cited higher projected Medicare Advantage spending and ongoing care cost growth as contributing factors.
The Supplementary Medical Insurance fund, which covers Part B outpatient and physician services and Part D prescription drugs, is structured differently. Its financing is recalibrated annually to match projected costs, so it faces no comparable depletion risk.
No immediate payment changes flow from this report. Trustees' reports serve as long-range policy signals, and Congress has acted to shore up the HI fund before the projected depletion date in every prior case where projections grew urgent.
In plain words
Once a year, the people who manage Medicare's money release a report. The 2026 report says the part of Medicare called Part A, which pays for hospital stays and nursing home care, could run low on money by 2033. When that happens, there might only be enough money coming in to pay about 89 cents of every dollar that hospitals are owed. Nothing changes right now for people on Medicare. Congress would need to pass new laws before 2033 to keep payments at full levels. The part of Medicare that pays for doctor visits and prescription drugs is funded differently and is not facing the same problem.
Understand the basics first
Source: CMS Medicare Trustees Report 2026
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