Medicare spending to shoot up by 2038: trustee report

Total Medicare costs are expected to grow from 3.7% of gross domestic product in 2018 to 5.9% in 2038, according to a new report from the Social Security and Medicare Boards of Trustees released Monday.

The report also projected that Medicare’s hospital insurance trust fund that covers Part A will run out by 2026, which the trustees predicted last year.

Since 2008, national health expenditure growth has been below historical averages, the report said. Medicare costs will increase gradually after 2038 to about 6.5% of GDP.

Reserves in the trust fund that covers Medicare Part A decreased by $2 billion to a total of $200 billion at the end of last year, according to the report. The trustees project that hospital insurance expenditures are expected to be slightly higher than last year’s estimates as payroll taxes decrease.

Things are rosier for the Supplementary Medical Insurance Trust Fund, which has $104 billion in assets at the end of the year and is on solid financial footing.

The trust fund covers both Medicare Part B and Part D. The trustees expect both parts of Medicare will be funded over the next decade and beyond as the fund resets premium income and general revenue income each year.

For Social Security, the trustees project that benefits will be able to be paid out until 2035, a full year later than projected in last year’s report.

https://www.modernhealthcare.com/government/medicare-spending-shoot-up-2038-trustee-report-says