Medicare Financing & Insolvency Projections

Medicare is the nation’s health insurance program for individuals aged 65 and over and certain disabled persons. Medicare consists of four distinct parts: Part A, or Hospital Insurance (HI); Part B, or Supplementary Medical Insurance; Part C, or Medicare Advantage; and Part D, the prescription drug benefit. The 2012 report of the Medicare Board of Trustees estimates that the HI trust fund will become insolvent in 2024. Although the Medicare trustees report that the financial outlook for the Medicare program appears to have improved as a result of the Affordable Care Act, they caution that the projections are more uncertain than normal, due to the potential for future expenditure reductions not to materialize. This book provides an overview of how the Medicare program is financed, including a description of the Medicare trust funds and a summary of key findings and estimates from the 2012 Report of the Medicare Board of Trustees regarding 2011 program operations and future financial soundness.