Medicare (Part A) insolvency 12 years sooner than expected

Comments

• Anna

  February 25

  Well, of course. That was a goal of Project 2025. The gutting of the revenue stream with the illusion of putting money in the pocket of current retirees was an enabling feature born of pure genius (and evil).
• Crash

  February 25

  @Anna's got it right.
• FD1000

  February 26 edited February 26

  Obama Care has been the main cause for HC expense explosion.
  One year before Obama care I priced the premiums. For my wife and me together, they were $400 monthly and $3500 deductible. They are now at $1200 per person (this is 6 times more) with an $8-10K deductible.
  That means about $29K out of pocket before seeing any doctor. We are both on Medicare.
• Anna

  February 26

  From the CBO summary linked above we can find the real explanation of the marked change in the projection. Note this is a change from the March 2025 projection, not a change from past decades.

  Changes in Our Projections Since March 2025
  The year in which the HI trust fund's balance is exhausted in our current projections, 2040, is 12 years earlier than in our most recent estimate of that date, which was published in March 2025. Measured in relation to taxable payroll, the trust fund's 25-year actuarial deficit is 0.17 percentage points greater in the current projections than in last year's. (Measured in relation to GDP, the actuarial deficit is 0.07 percentage points greater than we projected last year.) Those changes are driven largely by projections of less income to the fund. Projections of greater spending also contribute to the changes.
  
  Our projections of income to the HI trust fund are less this year than last year for three main reasons:
  
  First, revenues from taxing Social Security benefits are smaller in the current projections because of changes put in place by the 2025 reconciliation act (Public Law 119-21), which lowered tax rates and created a temporary deduction for taxpayers age 65 or older.
  Second, we decreased our projections of revenues from payroll taxes to account for projections of lower earnings.
  Finally, we now project interest income credited to the trust fund to be smaller than estimated last year because of the smaller trust fund balances in this year's projections.
  Spending is projected to be greater mainly because of an increase in expected spending per enrollee. Per-enrollee spending in Medicare Part A's fee-for-service program in 2025 and bids in 2026 by providers of Medicare Advantage plans were both higher than we expected, leading to projections of greater per-enrollee spending in both programs.
  
  Projections of the HI trust fund's balances are sensitive to small changes in projections of its spending and income. As a result, those estimates are highly uncertain.
  
  Phillip L. Swagel is CBO's Director.
• Mona

  February 26

  @Anna, thank you.
• DrVenture

  February 26 edited February 26

  GOP has always wanted to dissolve Social Security, Medicare, Medicaid, and more recently ACA. Ironically, the lawmakers who conspire to do this, have gold-plated taxpayer provided coverages that they gave themselves.
  
  Many who already have these benefits, want to keep theirs, but do away with everybody else's. Typical greedy self-absorbed people who always take, but never give. Meanwhile they keep their supporters on board by blaming anything/everything but themselves.
  
  When you point out a problem, they point fingers elsewhere. Why nothing important ever gets addressed in this country.
• msf

  February 26

  For those not interested in reading through the data, here's a quick summary of a JAMA study:

  Fact Check: Have healthcare costs risen faster since the Affordable Care Act was passed?
  
  No. While health care costs have continued to increase since President Obama signed the Affordable Care Act into law in 2010, they’ve done so at a slower rate than in the years before the law was passed.

  https://econofact.org/factbrief/fact-check-have-healthcare-costs-risen-faster-since-the-affordable-care-act-was-passed
  
  In nominal (not inflation adjusted) dollars, total national expenditures on health care have risen from $3T in 2014 to $4.87T in 2023. That's 1.62 times as much or 62% more .
  
  Implementation of the ACA started in 2010, though ACA plans were not offered until 2014. So to remove all impact of the ACA, we can compare 2014-2023 with the decade before 2010. In nominal dollars, total health care expenditures rose from $1.37T in 2000 to $2.49T in 2009. That's 1.82 times as much, or 82% more.
  
  https://www.kff.org/health-costs/health-policy-101-health-care-costs-and-affordability/ (Figure 1)
  
  If one wants to look at how these costs are allocated - between the government (taxpayers), employers, and individuals, that's a different question, one that's more complex. In 2026, the government share was reduced (many subsidies eliminated). This had devastating effects on some people.

  In 19 states [a 60-year-old at 401% of poverty] would see their premium payment at least triple on average for a benchmark silver plan, consuming more than 25% of annual income.

  https://www.kff.org/affordable-care-act/mapping-the-uneven-burden-of-rising-aca-marketplace-premium-payments-due-to-enhanced-tax-credit-expiration/
  
  We don't need to deal with abstractions. We can look at real people paying real money on real plans.

  Nancy Linder, 47, said she needs health insurance — and the ACA marketplace is currently the only good option for her and her husband.
  
  However, health premiums for the couple, who live outside Atlanta, tripled in 2026.
  
  They now pay $483 per month for their insurance plan, up from $162 per month in 2025 — a difference of nearly $3,900 per year.
  ...
  The Linders have been on the same silver-tier health plan since first signing up for ACA coverage.

  https://www.cnbc.com/2026/02/24/aca-enhanced-subsidy-expiration-effects.html
• DrVenture

  February 26

  Let us not let facts and knowledge get in the way of a great partisan talking points.
  Thanks @msf
  
  The Linder's example is pretty stark. This administration has burned a lot of people on ACA, including their own supporters. "Thank you, Sir, Can I have another", seems to be their mantra.
  
  Another relevant point is that many red states refused Medicaid expansion, burning their residents pretty badly with that. People in those locales have fewer, more expensive options.
• catch22

  February 26

  Thank you @msf
• Sven

  February 26

  The GOP wants to privatize social security and Medicare forever so to enrich their buddies to operate these business. So what so bad about universal healthcare plan with the middle men, the insurance companies ?
  
  So this administration talk about TrumpCare to replace ACA last year and it died. Talking about the quality of life and affordability !
• DrVenture

  February 26 edited February 26

  Back when trump was first elected, a clueless maga fellow that I worked with, complained about ACA, despite his kid being on it. Then said, will have to see what trump "replaces it with". I laughed right to his face. Here we are, a decade later, and despite wrecking ACA for tens of millions, still no plan!
  
  A freaking decade later, and another promise unfulfilled. The maga faithful duped by the promise of affordability, every single time! Health care for many millions is demonstrably worse, since GOP took an ax to the ACA. And government spending certainly hasn't gone down, as a result.
• MrRuffles

  February 26

  FD1000 said:

  Obama Care has been the main cause for HC expense explosion.
  One year before Obama care I priced the premiums. For my wife and me together, they were $400 monthly and $3500 deductible. They are now at $1200 per person (this is 6 times more) with an $8-10K deductible.
  That means about $29K out of pocket before seeing any doctor. We are both on Medicare.

  You sound confused about Medicare and the Affordable Care Act.
  
  The Medicare Part B premium is $203/month while there is no premium for Part A for most people. The annual deductible for Medicare Part B is $283.
  
  
• Observant1

  2:11AM edited 2:14AM

  "A freaking decade later, and another promise unfulfilled.
  The maga faithful duped by the promise of affordability, every single time!
  Health care for many millions is demonstrably worse, since GOP took an ax to the ACA."
  
  How can so many people be fooled so many times?
  This irrational behavior is certainly puzzling.
• msf

  8:12AM edited 8:22AM

  MrRuffles said:

  FD1000 said:

  Obama Care has been the main cause for HC expense explosion.
  One year before Obama care I priced the premiums. For my wife and me together, they were $400 monthly and $3500 deductible. They are now at $1200 per person (this is 6 times more) with an $8-10K deductible.
  That means about $29K out of pocket before seeing any doctor. We are both on Medicare.

  You sound confused about Medicare and the Affordable Care Act.
  
  The Medicare Part B premium is $203/month while there is no premium for Part A for most people. The annual deductible for Medicare Part B is $283.
  
  

  What FD wrote about numbers has a good basis in fact, though the conclusion that he led with (that the ACA is to blame for rising health costs) doesn't follow.
  
  In 2015 I paid about $260/person, though that was for a platinum-plated plan as I knew I would have major surgery. That covered everything except $1000 IIRC. 2026 bronze HSA-qualified plans in Fulton County, GA for people aged 60 start at around $1200/person (or $2400 for a couple if purchased that way) with individual deductibles around $10K. So far, numbers seem to be in the right ballpark.
  
  Why have premiums and deductibles of ACA plans (as opposed to health care costs in general) gone up so much?
  https://hsph.harvard.edu/health-policy-management/news/health-insurance-premiums-are-rising-heres-why/
  
  Two factors are pushing the ACA plans toward a death spiral. A death spiral happens when healthier, typically younger individuals opt out. The individuals remaining use more and more costly services. This drives up insurance costs. Rinse and repeat (feedback loop).
  
  One of the factors is the reduction (to $0) of the penalty for not enrolling. The ACA was designed to nudge people into subscribing by making it more expensive to opt out. Even Obama, who campaigned on no penalties, came around to recognizing that to some extent they are needed.
  
  The other factor, and a flaw from day one, was that government subsidies to make the plans truly affordable fell off a cliff based in income. Earn a dollar more than the max allowed and you got zero subsidy. Biden addressed this flaw. But now that his subsidies have not been extended, we are seeing the full impact of these two changes. Fewer people enrolling and those who do enroll are less healthy.
  
  https://www.hks.harvard.edu/faculty-research/policy-topics/health/health-insurance-subsidies-behind-government-shutdown
  
  It is informative to compare the ACA plan increases with those of Medicare Part B. Even though Medicare subscribers are older than ACA subscribers, you don't have the problem of the more healthy elders opting out. Everyone uses Medicare. (Well, almost.)
  
  In 2015, the premium was $104.90. In 2025 it was $185. That's a 76% increase. Not outstanding, but way better than the 5-fold ACA plan increase. At least some of the Medicare increase was due to adding benefits, like opioid addiction treatment (Trump) and a $35 cap on insulin (Biden) that sometimes comes under Part B.
  
  Finally, regarding the mixing of Medicare and ACA. FD is speaking somewhat hypothetically, since as he noted, he's on Medicare. More specifically, a PFFS Medicare Advantage plan.
• Observant1

  6:28PM edited 6:36PM

  "The primary culprit for this accelerated depletion is a sharp reduction in the fund’s projected income,
  heavily driven by legislation passed over the last year.
  Specifically, the 2025 reconciliation act (Public Law 119-21, more commonly known as the
  One Big Beautiful Bill Act) significantly reduced the revenues the trust fund normally receives
  from taxing Social Security benefits.
  This legislation lowered tax rates and established a temporary deduction for taxpayers age 65 or older.
  Consequently, this major policy shift enacted during the Trump administration
  has directly contributed to starving the Medicare safety net of critical future funding."
  
  https://fortune.com/2026/02/23/how-trump-wiped-out-12-years-of-medicare-funding-cbo-one-big-beautiful-bill
  
  
  Comments: Only one year's time but so much damage to programs essential to many American's well-being.
  The shrill MAGA rallying cry is but an empty promise.