The Medicare Part A inpatient hospital care insurance program lost $5.8 billion in 2019 on $323 billion in revenue.
That compares with a loss of $1.6 billion on $303 billion in revenue in 2018, according to the new Medicare Trustees Report.
The program’s main source of revenue, payroll taxes, rose 6.3%, to $285 billion, but low interest rates cut interest income and other investment income to $9 billion, from $9.8 billion.
- Medicare Trustees Report documents are available here.
- Social Security Trustees Report documents are available here.
- An article about Medicare and Social Security’s 2018 results is available here.
Benefits payments climbed 6.5%, to $323 billion.
Most Americans qualify for “free” Medicare Part A coverage at retirement, by making payroll tax contributions during their working years, or being married to someone else who’s contributed to the program.
But some Americans, including some immigrants, and never-married people who have not spent much time earning wages, have to pay premiums for Medicare Part A coverage.
Medicare’s voluntary Medicare Part A premium revenue increased 7.5% between 2018 and 2019, to $3.9 billion.
The Medicare Part A Trust Fund Depletion Date
The trustees predict that the trust fund could be depleted in 2026.
If the trust fund were empty, current revenue could cover more than 90% of the Medicare Part A program’s costs in 2026.
Over a 75-year period, however, the program’s actuarial deficit has narrowed to 0.76% of taxable payroll, from 0.91% in the report released a year ago.
The actuarial deficit gap narrowed partly because 2019 costs were lower than expected, and partly because a change in the demographic factors used to calculate future benefits obligations, the trustees say.
The Medicare program also offers the Part B physician and outpatient services program. Managers of the program pay for it with payroll taxes and premiums, rather than with a trust fund.