06/11/2026

2026 Medicare Trustees Report Projects Earlier Insolvency Date

The Medicare Trustees’ 2026 Annual Report, released June 9, projects that Medicare’s Hospital Insurance (HI) Trust Fund will be unable to pay full benefits sooner than previously expected, with insolvency now projected to occur a quarter earlier than last year’s estimate. The report follows a significant shift in 2025, when the projected depletion date moved from 2036 to 2033.

According to the report, several factors are contributing to Medicare’s long-term financial challenges. Trustees cited higher projected utilization of skilled nursing facility and hospice services, increased Medicare Advantage (MA) spending, and lower anticipated revenue from income taxes on Social Security benefits resulting from recently enacted tax changes. The report also incorporates updated assumptions related to MA payment benchmarks and enrollment growth among higher-cost populations in Special Needs Plans.

Some factors helped offset these pressures, including lower-than-expected HI expenditures in 2025 and demographic changes associated with lower immigration and birth rates.

The report also highlights spending on skin substitute products as a major driver of Medicare cost growth over the past five years. Trustees note that recent changes in the CY 2026 Physician Fee Schedule are expected to reduce these expenditures. LeadingAge has previously expressed concerns about rising skin substitute spending, including comments submitted on the FY 2027 Hospice Wage Index Proposed Rule.