Medicare Finances: Findings of the 2020 Trustees Report

Medicare provides health insurance coverage to about 61 million Americans – 52.6 million ages 65 and older and 8.7 million persons with disabilities – and is one of the nation’s largest sources of health coverage. Close to 20 percent of U.S. health expenditures flow through Medicare, which provides coverage for about one of every six people residing in the country.

According to the 2020 Medicare Trustees Report, expenditures from Medicare’s Health Insurance (HI) Trust Fund exceeded revenues by $5.8 billion in 2019. Without a policy change aimed at increasing revenues or reducing expenditures, the surplus that has accumulated in the HI Trust Fund over the years will be depleted by 2026. The HI Trust Fund will have to rely on annual revenue from Medicare payroll taxes and to a lesser extent other sources of income, which together are projected to cover 90 percent of annual expenditures in 2026. The solvency of the HI Trust Fund is separate and apart from the program’s impact on the federal budget and the continued affordability of beneficiary cost-sharing.