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Medicare trustees predict Hospital Insurance Trust Fund will run dry in 7 years — 5 takeaways

Medicare's Hospital Insurance Trust Fund will be able to pay full benefits until 2026, but the Supplementary Medical Insurance Trust Fund is expected to have adequate financing in all years, according to a report from the Medicare Board of Trustees.

Five takeaways:

1. Since last year, the HI actuarial deficit has increased from 0.82 percent of taxable payroll to 0.91 percent. The increase was driven by lower assumed productivity growth, slower projected growth in skilled nursing facility utilization and other factors.

2. Total Medicare costs — including both HI and supplementary medical insurance expenses — are projected to increase from about 3.7 percent of gross domestic product in 2018 to 5.9 percent of GDP by 2038 and about 6.5 of GDP by 2093.

3. The SMI Trust Fund covering Medicare Part B and Part D had $104 billion in assets at the end of 2018. Part B helps pay for physician and outpatient hospital services.

4. SMI Trust Fund is expected to have sufficient financing in all years because premium and general revenue income are reset annually.

5. SMI costs are expected to steadily increase from 2.1 percent of GDP in 2018 to about 3.7 percent of GDP in 2038.

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