In their annual report, the Medicare trustees announced on March 25 that both the Medicare hospital trust fund and the supplementary medical insurance trust fund expenditures are growing faster than the rest of the economy. Expenditures were $432 billion in 2007, or 3.2 percent of gross domestic product (GDP), and are projected to increase to nearly 11 percent of GDP in 75 years.
According to the report, Medicare’s hospital insurance (HI) trust fund will become insolvent earlier in 2019 than reported last year. HI expenditure growth is estimated to average 7.4 percent each year over the next 10 years, a higher rate than either GDP or consumer price index (CPI) growth. This year the HI trust fund will spend more than its income, and from 2009 through 2017, about $342 billion will need to be transferred from the federal treasury to cover beneficiaries’ hospital insurance costs. Download the report.
