Number: RS20173
Title: Medicare: Financing the Part A Hospital Insurance Program
Authors: Jennifer O'Sullivan, Domestic Social Policy Division; and Heidi G. Yacker, Information Research Division 
Abstract: The HI and SMI trust funds are overseen by a board of trustees that makes annual reports to Congress. The 2008 report projects that under intermediate assumptions, the HI trust fund will become insolvent in 2019, the same year projected in 2007. The HI fund fails to meet both the short- and long-range tests for financial adequacy. Because of the way it is financed, the SMI fund does not face insolvency; however, the trustees are concerned with the program's continued rapid growth rate. The trustees stress the importance of considering the Medicare program as a whole, They estimate that the difference between outlays and dedicated financing sources is estimated to reach 45% of outlays in 2014. The law requires issuance of a determination of "excess general revenue Medicare funding." This determination triggers the second consecutive funding warning and the second year the President is required to submit a corrective legislative proposal with the following year's budget submission.
Pages: 6
Date: March 28, 2008