2026 Medicare Trustees Report
Article Publication Date
Summary
The Centers for Medicare & Medicaid Services has released the Medicare Trustees Report. This report summarizes past financial operations and projects future operations of the Hospital Insurance (HI) Trust Fund for Medicare Part A, and the Supplementary Medical Insurance (SMI) Trust Fund for Medicare Part B and Part D. According to the 2026 report, the HI Trust Fund, which helps cover inpatient hospital stays, skilled nursing facilities, hospice, and home health (Part A), will not have enough funds to pay all its bills starting in 2033, similar to last year's projection. The projected income for HI in 2033 will be sufficient to pay 89% of scheduled benefits. The SMI trust fund, which helps pay for physician, outpatient hospital, home health, and other services (Part B) and subsidized access to drug insurance coverage (Part D), is expected to be adequately financed over the next ten years.
Driven in part by rising costs per person and the aging of the baby boomer generation, Medicare spending is growing much faster than the overall economy, with costs expected to rise from 3.9% of GDP in 2025 to 7.5% by 2100 under current law, and potentially as high as 9.8% if health care prices rise faster than assumed. Drug costs alone surged from $146 billion to $181 billion between 2024 and 2025, partly due to the rapid rise in use of expensive new medications like GLP-1 drugs and specialty drugs. The Medicare Part B monthly premium is estimated to increase next year to $209.50, up from the current $202.90, and the annual Part B deductible is estimated to increase from $283 in 2026 to $292 in 2027.
Driven in part by rising costs per person and the aging of the baby boomer generation, Medicare spending is growing much faster than the overall economy, with costs expected to rise from 3.9% of GDP in 2025 to 7.5% by 2100 under current law, and potentially as high as 9.8% if health care prices rise faster than assumed. Drug costs alone surged from $146 billion to $181 billion between 2024 and 2025, partly due to the rapid rise in use of expensive new medications like GLP-1 drugs and specialty drugs. The Medicare Part B monthly premium is estimated to increase next year to $209.50, up from the current $202.90, and the annual Part B deductible is estimated to increase from $283 in 2026 to $292 in 2027.