Medicare Part A Trust Fund Depletion Forecast and Spending Patterns 2026

The Medicare Trustees' 2026 report forecasts the depletion of the Medicare Part A Hospital Insurance Trust Fund by mid-2033. In 2025, total spending on Medicare Parts A and B reached $481 billion, with skilled nursing facility (SNF) services comprising about $31 billion. The sustainability of the Part A fund, which covers inpatient hospital care, SNF, and home health services, is a significant concern, driven by changes in projected Social Security payroll tax revenues due to the 2025 budget reconciliation.

A notable shift in Medicare spending patterns is evident, with a decline in Part A services as a share of total Medicare expenditures over the past decade. In 2025, Part A services represented 37% of total spending, down from 43% in 2016. This decline is attributable to the migration of services from inpatient to outpatient settings and the broader range of services now covered under Part B. SNF services accounted for 6% of the combined Part A and B spending, amounting to $31 billion.

The report also underscores the growth of Medicare Advantage (MA), which reached $534 billion in 2025, composing 53% of total Medicare expenditures. This surge is largely due to increased enrollment, with 54% of eligible beneficiaries participating in MA plans by 2025, compared to 33% in 2016. Notably, Medicare spends 14% more per enrollee in Medicare Advantage, which could raise costs by $76 billion in 2026, with spending projected to grow to $1.3 trillion by 2035, representing 59% of Part A and B expenditure.