📋 Medicare’s Financial Health Worsens (AARP Article)

[SpringIsHereVA]

FROM THE ARTICLE.

Medicare’s Financial Health Worsens.

A new report expects the funds for Part A hospital insurance are at risk after 2033.

By Tony Pugh, AARP. Published June 18, 2025.

Medicare trust fund that helps pay for inpatient hospital stays, known as Part A, won’t have enough money after 2033 to pay all of Medicare beneficiaries’ expected hospital bills — three years sooner than was projected last year — according to this year’s Medicare Board of Trustees report published June 18.

At that point, the Part A Hospital Insurance Trust Fund’s reserves “will become depleted and continuing program income will be sufficient to pay 89 percent of total scheduled benefits,” the trustees said in a message to the public, published alongside the report.

USE LINK BELOW TO READ THE ARTICLE.

https://www.aarp.org/medicare/trustees-report-2025.html

[SpringIsHereVA]

This is the 1st time I am hearing about this & it p.sses me off!!!  😤

They already saying Retirement Social Security in trouble (2034 or 2035 crisis point).

But here in my Virginia location it seems the illegals are MORE IMPORTANT THAN US OLD PEOPLE????

Nope, take care of the LEGAL Americans 1st & then help OTHERS if there is anything LEFTOVER.

We SENIORS have worked hard ALL OF OUR LIVES & now dealing with the "possibilty" of LOSING our benefits.  😤

Geez,.....

[GailL1]

 Got Any ideas of how to fix it? 

The Social Security Trustee Report covers this every year just like the health of the Social Security programs - Old Age, Survivors, Disability - They are all part of the same law.  Medicare,Medicaid and Social Security but handled in different ways because they are different programs .

ONLY Medicare Part A has a continuously running Trust Fund that is funded from payroll taxes and contributions from your employer during one’s working years - that’s why Medicare Part A is free of premiums for most people because they have worked under the system long enough to be vested - 40 Quarters.  

Medicare Part B and Part D are month to month/ year by year working Trust Funds only - We pay in premiums and the government puts in their lion share to meet the demand of these two Medicare Parts - That’s why these premiums are adjusted on beneficiaries every year - based on the usage of the previous year.  To keep these Parts of Medicare funded, CMS just UPs the premiums and the government then pays more - so these two programs will never run out of money although people might start to grip about the cost of the premiums. 

From the most recent SS Trustee Report Summary that I posted a few days ago - AARP Community Social Security - 06/18/2025 - Social Security 2025 Trustee Report Summary Has Been R... 

• The Hospital Insurance (HI) Trust Fund will be able to pay 100 percent of total scheduled benefits until 2033, three years earlier than reported last year. At that point, that fund’s reserves will become depleted and continuing program income will be sufficient to pay 89 percent of total scheduled benefits. NOTE:  THIS IS MEDICARE PART A.

• The Supplementary Medical Insurance (SMI) Trust Fund is adequately financed into the indefinite future because, unlike the other trust funds, its main financing sources—enrolled beneficiary premiums and the associated federal contributions from the Treasury—are automatically adjusted each year to cover costs for the upcoming year. Although the financing is assured, the rapidly rising SMI costs have been placing steadily increasing demands on beneficiaries and general taxpayers. NOTE THIS IS MEDICARE PART B and PART D

So what can fix this Medicare problem?  More money but from where?

Options might include and I am just throwing these out for consideration.

• Higher Medicare payroll taxes and matched contributions from the employers during a persons working years - kind of late to count on this to be a fix since 2033 seems to now be the dooms day.  But long term it may have to be done - sorry working younger people.
• Perhaps adding an additional premium for beneficiaries to pay for Part A when they go on Medicare Part A.
• Perhaps reducing the cost of the Medicare Part A program but that would mean looking at benefits - Part A covers INpatient care, rehab following a hospitalization, Hospice 
• Perhaps the deductible for Part A will have to go higher - but it is already over $ 1600 PER BENEFIT PERIOD - and then of course, many will want their Medicare Supplemental to pick any higher deductible like it does now - of course, at a higher Medigap premium.
• Perhaps add in some cost for those auxiliary benefits like coverage for a stay at home spouse or disabled adult children.

We already tax ALL wages for Medicare Part A - so nothing more that we can do there except raise the rate.  

IDEAS  ??  I am sure that legislators are all ears.  Personally, we may have to do a bit of everything - raise rates on working people, adjust some of the benefits, charge more for any auxiliary or passed on benefits, perhaps a more managed care type plan, raise the deductible, maybe add another deductible for other services  - I don’t really know - but I do know that people will probably grip about any change one way or the other. 

[Tonster521]

@gail1  Although the Net Investment Income Tax (NIIT) may not be a one and done solution, it will provide approximately $40 to $60 Billion per year in additional revenue. I am including a link that explains how that Medicare revenue (NIIT) was directed to funding the ACA as opposed to Medicare. https://www.urban.org/sites/default/files/2025-01/Net%20Investment%20Income%20Tax.pdf  As you know, the ACA did expand Medicaid eligibility to folks who would not otherwise qualify for assistance. I believe it may be called the bronze plan. The link provides pertinent info regarding why this Medicare tax was allocated to the ACA. Essentially, the "Cadillac Tax" which was suppose to generate positive tax dollars from high value insurance plans was never implemented after finding out most high value plans were Union and Government Plans and not Corporate Executive Plans. Most Corporate Executive Plans required high deductibles, co pays, and coinsurance as well as high monthly contributions. So, their value was significantly less than Union and Government Plans. So, the government did not implement the "Cadillac Tax" and redirected the NIIT to fund the ACA rather than Medicare. Don't you just love how Congress thinks. BTW, the NIIT is noted in the US Tax CODE as Unearned Income Medicare Contribution. The ACA should be funded by general tax revenue from all taxpayers and not by Medicare taxes. 

[GailL1]

And here I thought all along that the NIIT was going to the Medicare HI Trust Fund - sure pulled one on me since it just goes to the general fund.

For the longest time, I have had a problem figuring out where the balance sheet was for Medicare and then finally I found it - I still cannot find it broken down by years / type as the SSA data for Social Security is done.

CMS.gov - 2025 ANNUAL REPORT OF THE BOARDS OF TRUSTEES OF THE FEDERAL HOSPITAL INSURANCE AND FEDERAL... 

So currently the income for Medicare Part A or the HI Trust Fund comes from:  (see page 10 of the report)

• Payroll Taxes
• Special Treasuries Interest
• Taxation of Social Security Benefits ( a portion)
• Premiums
• Government contributions
• Other ?
• Payment from state - it says none but I thought that some states did pay for Medicare Part A premiums under the Medicare Savings Program - so I am questioning this.

I have not read the whole report yet - or even all of the Overview yet but there was something on page 7 that did interest me -

from the link - page 7 

As required by law, the Trustees are issuing a determination of projected excess general revenue Medicare funding in this report because the difference between Medicare’s total expenditures and its dedicated financing sources is projected to exceed 45 percent of expenditures within 7 years. Since this determination was made last year as well, this year’s determination triggers a Medicare funding warning, which requires the following:

• The President to submit to Congress proposed legislation to respond to the warning within 15 days after the Fiscal Year 2027 Budget submission; and Congress to consider the legislation on an expedited basis.

This is the ninth consecutive year that a determination of excess general revenue Medicare funding has been issued, and the eighth consecutive year that a Medicare funding warning has been issued.

Will we see any action?  

[Tonster521]

@gail1 This is a follow up to my reply dated June 27, 2025. I stand corrected. We have seen action, but in the wrong direction. The BBB will provide folks over 65 with an additional $6,000 deduction (single) or $12,000 deduction (married Filing Jointly) for the period 2025 through 2028. There are income limits in order to qualify for the additional deductions. In any event, it is estimated that approximately 80% or greater will no longer pay Federal Income Taxes on their SS Benefits. That means the SS Trust and the Medicare Trust will lose revenue. So, both Trusts may become depleted sooner than 2033. What is Congress thinking?

[Tonster521]

@GaiL1 I do not think we will see any action. Although not a favorite among the Medicare beneficiaries, is to let Medicare Part A run its course and have Medigap Plans cover the shortfall. Of course, Medigap premiums will increase to cover that shortfall. Increasing Medicare Payroll taxes that Workers pay is also not a favorite. Lastly, price controls which the AMA and the American Hospital Association (AHA0 will fight "tooth and nail" through lobbying efforts. Something to consider, the shortfall can be covered by the General Fund wherein all taxpayers contribute. 

With regard to Table IIB1of the Report, do you have any idea what $44.9 Billion of expenditures listed as Other (under Part A) represents? Could this be the NIIT (3.8% Medicare tax) that the high income folks pay that is used to fund the ACA instead of Medicare?

[TRL1111]

---

@Tonster521 wrote:

As you know, the ACA did expand Medicaid eligibility to folks who would not otherwise qualify for assistance. I believe it may be called the bronze plan. 

---

This is confusing.  ACA plans are labeled as Bronze, Silver, Gold, and Platinum.  It sounds like you're saying that people who qualify for Medicaid under the ACA's Medicaid expansion provisions have Bronze plans.  That's not the case.  They have Medicaid, which is is own program, and nobody on Medicaid has any sort of ACA plan, regardless of the type of metal.  

[Tonster521]

 @@TRL1111 The ACA is complicated and confusing to many folks. In addition to the variety of insurance benefit plans with names of metals, there is a Medicaid Expansion Plan which may vary from State to State. I have used the word, "may" because I do not know the provisions of each Medicaid Plan and their variations in all of the States. Just like in my reply on June 23, 2025 to GaiL1's post dated June 19, 2025 asking for Ideas, I used the word, "may" be called the bronze plan because I did not know the name of the Medicaid Expansion Plan pursuant to the ACA. There may not be a name for such Plan. Again, my suggestion is to use the word,"may", when you do not know the accurate answer. 

It should be abundantly clear that the ACA provides for Medicaid Expansion Plans and such Plans are not the same as Traditional Medicaid which may vary from State to State. In States that expanded Medicaid pursuant to the ACA, the income eligibility is up to 138% of the Federal Poverty Level (FPL) as opposed to just 100% of the FPL if the State did not expand Medicaid. These folks between 100% FPL and 138% FPL only qualify for Medicaid because of the ACA. Moreover, there may be some cost sharing or limitations on certain benefits that may vary from State to State. Also, States that expanded Medicaid receive 90% (currently) of the cost of the Medicaid Expansion Plan as opposed to just 50% to 77% for the States that did not expand Medicaid. It should be noted that some States have a "trigger mechanism" that states if such ACA funding drops below 90%, the State will no longer expand Medicaid pursuant to the ACA. Such State will provide just Traditional Medicaid.  

Lastly, I have not been directly involved with the ACA for several years. However, I have done tax work regarding repaying premium tax credits received pursuant to the ACA. Also, a person otherwise eligible for Medicaid (Traditional or via ACA) is not required to enroll in Medicaid. It is voluntary. If enrolled, a person may need to use a certain Medicaid provider or there is no coverage. There are many articles that you can review regarding the ACA. Here is one from KFF https://www.kff.org/status-of-state-medicaid-expansion-decisions/ Here is another that I read on the internet that provides a very good explanation. https://jarvisfirm.com/federal-poverty-level-2025-medicaid-income-limits-guidelines/

[TRL1111]

---

@Tonster521 wrote:

I used the word, "may" be called the bronze plan because I did not know the name of the Medicaid Expansion Plan pursuant to the ACA. There may not be a name for such Plan.

---

There is a name for the plan people get who qualify for Medicaid under the ACA's expansion provisions.  The plan is called Medicaid.

Even mentioning a "metal" name, like bronze, is totally wrong and massively confusing when talking about Medicaid.  Maybe you thought a Bronze Plan was what expanded Medicaid people got because it's the "lowest" level of coverage under ACA?  I have no clue, but it's wrong.  A Bronze Plan is an ACA plan, and nobody on Medicaid has an ACA plan.  They have Medicaid.  "Medicaid" is what people who are on Medicaid have, regardless of how they qualify for it.

---

@Tonster521 wrote:

Again, my suggestion is to use the word,"may", when you do not know the accurate answer.

---

Or better yet, don't throw stuff out there under the cover of "may."  If you don't know the answer, then don't give an answer. 

---

@Tonster521 wrote:

These folks between 100% FPL and 138% FPL only qualify for Medicaid because of the ACA. Moreover, there may be some cost sharing or limitations on certain benefits that may vary from State to State.

---

There we go with "may."  Can you point to any differences in Medicaid coverage between people who "traditionally" qualify for Medicaid and people who qualify only because their state adopted the Medicaid expansion provisions under the ACA?

[Tonster521]

 @TRL1111, Medicaid is a program established in 1965 by amendments to the Social Security Act. It is governed by Title XIX (19) of such Act and is a joint state-federal program. Medicaid is not an insurance benefit plan. Each State designs and administers its own Medicaid Program, sets eligibility requirements, determines the scope and type of services and establishes the rate of payments. The federal's role, aside from establishing Mandatory and Optional Benefits, is to provide matching funds (money) based on various criteria. https://www.medicaid.gov/medicaid/benefits/mandatory-optional-medicaid-benefits It should be noted that certain "Optional Benefits" called Alternate Benefit Plans (i.e., Mental Health and Substance Abuse, etc.) are Mandatory for the Medicaid expansion population. https://www.medicaid.gov/state-resource-center/eligibility-enrollment-final-rule/alternative-benefit... Also, prior to the ACA, matching funds varied from about 50% to 75%. For States that expanded Medicare pursuant to the ACA, the initial years were matched at 100%. That rate has been reduced to 90%. If the 90% is reduced, many states have a "trigger mechanism" that will be implemented to exit the Medicaid expansion provisions of the ACA. So, I suspect that a State would want their input with respect to naming a Plan. It is possible that a State may name their plan Medicaid. So,please let us readers know if there is such a Plan and the State as well. I think all of us would appreciate a link to that information rather than an opinion. FYI, in my State, Medicaid is called "All Kids" or the "Medical Card". Within this Medicaid Program there are different benefit coverage with different plan names for different populations such as Family Care, Moms & Babies, ACA Adults, and Aid to the Aged, Blind and Disabled. Different Plan names are used to identify the different delivery systems as well. https://www.macpac.gov/medicaid-101/provider-payment-and-delivery-systems/ You need to be aware that there are alternate policies for the Medicaid expansion population and benchmark plans as well. https://www.macpac.gov/subtopic/medicaid-expansion/ 

I suggest that you read the links that I provided in this post and my other posts. Hopefully, you will comprehend the information and learn that Medicaid is a complex program that vary fro State to State. Most States are using Managed Care Plans. Some approaches require a Primary Physician to access benefits. Some Medicaid plans are limited to certain physicians willing to accept payment significantly less than medicare payments. Some Medicaid plans require a payment that varies (depending on the medical/dental service) from the beneficiary until a "spend down" amount is reached. With regard to Medicaid Managed Care Plans, there are 195 plans per this link https://data.medicaid.gov/dataset/0e112ea8-8e8e-5dee-a7e2-7ed551c3baa4#data-table If you add all the other types of Medicaid plans that are available in the USA, I am sure they exceed 250 plans. Should you elect, you can review each Medicaid plan in the USA to find their exact name, benefit provisions, and required payments, if any. You should learn that there are different values to each approach in every State. They may be not rated and beneficiaries may not have a choice electing one plan over the next. So, I suggest you follow your own advice that appears in the fifth paragraph of your June 24, 2025 post. Moreover, many folks use the phrase, "In my opinion" (IMO) when they do not have the facts. 

[SpringIsHereVA]

NO I don't @GailL1 .

[GailL1]

That has NOTHING whatsoever to do with Medicare Part A - Legal immigrants only have access to Medicare once they have worked the required amount of time and are still living here when they can go onto the program - They pay in the same amount while working - rate is 1.45% of their earned income and is matched the same amount by their employer.

Pure and simple this is a problem with how much goes in from payroll taxes vs what is coming out via Medicare Part A benefits.

Both or one of those has to be adjusted for the long term.

[TRL1111]

---

@GailL1 wrote:

That has NOTHING whatsoever to do with Medicare Part A

---

Please do not muddy the issue with facts.