Medicare’s trust fund faces insolvency in 2026. Here’s how that squares with Democrats’ efforts to expand the health insurance program – CNBC
FatCamera | E+ | Getty Images
It's a situation that appears incongruous: Congressional Democrats want to expand Medicare's benefits while a trust fund that supports the program is facing insolvency.
Indeed, some Republican lawmakers have seized on that looming problem as a reason to oppose a proposal to add dental, vision and hearing coverage to Medicare. The provision is included in Democrats' 10-year, $3.5 trillion spending plan that would expand the social safety net and battle climate change, among other policy goals.
"Democrats are ramming through a reckless new expansion of Medicare just as it's a few years from bankruptcy," said Rep. Kevin Brady, R-Texas, in prepared remarks at a House Ways and Means Committee session on Thursday as debate began on portions of Democrats' massive legislative package.
Because of how Medicare is structured, adding dental, vision and hearing coverage would have little impact on the trust fund that's forecast to be insolvent beginning in 2026.
"In short, we're largely talking about different pots of money," said David Lipschutz, associate director and senior policy attorney for the Center for Medicare Advocacy.
Medicare has about 62.8 million beneficiaries, the majority of whom are at least age 65 or older. That's the age when most Americans must enroll unless they meet an exclusion (such as having qualifying health insurance elsewhere).
Here's a look at more retirement news.
Basic Medicare consists of Part A (hospital insurance) and Part B (outpatient care coverage). There also is Part D, which is prescription drug coverage. About 44% of beneficiaries choose to get those benefits through an Advantage Plan (Part C), an option offered by private insurance companies that may include limited coverage for dental, vision and hearing.
In simple terms, it's the Part A trust fund that is facing a shortfall beginning in 2026, according to the latest trustees report. Unless Congress intervenes before then, the fund would only be able to pay roughly 91% of claims under Part A beginning that year.
That trust fund gets most of its revenue from dedicated taxes paid by employees and employers.
Generally, workers pay 1.45% via payroll tax withholdings (although an additional 0.9% is imposed on income above $200,000 for single taxpayers or $250,000 for married couples). Employers also contribute 1.45% on behalf of each worker. Self-employed individuals essentially pay both the employer and employee share.
The expansion of benefits under Part B would have no direct impact on the solvency challenges facing the Part A hospital insurance trust fund.
Tricia Neuman
Executive director for the Kaiser Family Foundation's program on Medicare policy
Meanwhile, Part B which the expanded benefits would fall under gets its funding from monthly premiums paid by Medicare beneficiaries as well as from the federal government's general revenue. Same goes for Part D. And each year, premiums and revenue allocations are adjusted to reflect anticipated spending and ensure there's no shortfall.
"The expansion of benefits under Part B would have no direct impact on the solvency challenges facing the Part A hospital insurance trust fund," said Tricia Neuman, executive director for the Kaiser Family Foundation's program on Medicare policy.
Nevertheless, she said, adding dental, vision and hearing would have an effect on overall Medicare spending. A 2019 congressional report, based on a bill that would have added those benefits, estimated the cost to be $358 billion.
However, also included in Democrats' current spending plan is the goal of allowing Medicare to negotiate with drug manufacturers which currently is prohibited as a potential way to help pay for the expanded benefits.
"The prescription drug savings would be used to offset these new costs but there are a lot of competing spending priorities for the savings that are on the table," Neuman said.
The Democrats' massive legislative package is in the early stages of being debated. In addition to adding Medicare benefits, some Democrats want to include a lower eligibility age for Medicare (currently age 65).
Other health-care-related goals include extending the expanded premium subsidies for health-care insurance through the Affordable Care Act's public marketplace now in effect for just 2021 and 2022 and, in states that have not expanded Medicaid, providing coverage for eligible individuals.
It remains unclear whether the legislation that ends up being voted on will include everything being debated or whether current details of various provisions will end up modified. For the expanded Medicare benefits, the House measure would implement vision and hearing coverage in 2022 and 2023, respectively, while dental benefits would not begin until 2028.
"This is the closest we've come since the inception of the program for adding these benefits," said Lipschutz, of the Center for Medicare Advocacy.
"There's a sense that if we don't take advantage of this opportunity, another won't come along for a long time," he said.
As for the insolvency issues with the Part A trust fund, there are several options that could help remedy the problem, Neuman said. For instance, Medicare could cut payments to providers (hospitals, skilled nursing facilities, etc.) or to Advantage Plans. Or, cost-sharing for beneficiaries i.e., deductibles or copays could be increased.
Alternatively, additional funding sources could be identified. That could include ensuring certain taxpayers can't dodge the Medicare employment tax which has been proposed by Democrats as a way to increase revenue or redirecting other taxes to the trust fund.
"None of the policy options are politically appealing, but at some point Congress will need to address this issue to be sure that beneficiaries can get benefits to which they're entitled and providers get paid," Neuman said.
See the rest here:
Medicare's trust fund faces insolvency in 2026. Here's how that squares with Democrats' efforts to expand the health insurance program - CNBC
- Exclusive | Democrats Get Lowest Rating From Voters in 35 Years, WSJ Poll Finds - The Wall Street Journal - July 27th, 2025 [July 27th, 2025]
- Democrats' 2028 presidential race is going fast and furious - Axios - July 27th, 2025 [July 27th, 2025]
- Democrats rally in Texas over Trump order to redraw districts: The only way they can keep power is to cheat - The Guardian - July 27th, 2025 [July 27th, 2025]
- Democrats Fight Against Republican Funding Bill that Raises Utility Bills and Energy Prices, Slashes Resources for the Arts and National Parks -... - July 27th, 2025 [July 27th, 2025]
- Elon Musk is threatening to put third-party candidates on the ballot. Democrats are giddy. - Politico - July 27th, 2025 [July 27th, 2025]
- Can Texas Democrats Stop the Redistricting By Breaking Quorum? - Democracy Docket - July 27th, 2025 [July 27th, 2025]
- Texas Democrats Confer With California and Illinois Governors on Redistricting - The New York Times - July 27th, 2025 [July 27th, 2025]
- Rep. Ro Khanna thinks the Epstein files could help Democrats 'fight Trump effectively' - NBC News - July 27th, 2025 [July 27th, 2025]
- Iowa Democrats kick off canvassing campaign ahead of upcoming elections - KTIV - July 27th, 2025 [July 27th, 2025]
- Democrats request copy of Epstein birthday book that reportedly contains Trump poem - The Guardian - July 27th, 2025 [July 27th, 2025]
- Texans, Democrats condemn GOP redistricting plans at first public hearing - The Texas Tribune - July 27th, 2025 [July 27th, 2025]
- Are the Democrats Getting Better at the Internet? - newyorker.com - July 27th, 2025 [July 27th, 2025]
- Scoop: Democrats think they can get their hands on Epstein's birthday book - Axios - July 27th, 2025 [July 27th, 2025]
- Former Governor Roy Cooper speaks to NC Democrats during annual Unity Dinner ahead of likely 2026 Senate run - ABC11 - July 27th, 2025 [July 27th, 2025]
- An early report on the Kansas governor's race: Heavyweight Republicans and low-key Democrats - Kansas Reflector - July 27th, 2025 [July 27th, 2025]
- Wave of young Pa. Democrats engaging in politics as party debates its future - Pittsburgh Post-Gazette - July 27th, 2025 [July 27th, 2025]
- Democrats Chances of Flipping the Senate Just Went Up - New York Magazine - July 27th, 2025 [July 27th, 2025]
- Democrats Should Use Shutdown Threat as 'Leverage' to Oppose Cuts, Says Rep. Subramanyam - Bloomberg.com - July 24th, 2025 [July 24th, 2025]
- In Epstein, Democrats Find Weapon Against Trump and Republicans - The New York Times - July 24th, 2025 [July 24th, 2025]
- Wisconsin Democrats launch push to take the majority in the Senate after years in the shadows - Milwaukee Journal Sentinel - July 24th, 2025 [July 24th, 2025]
- Two Democrats Are Bolting From a Bipartisan Governors Group - The Atlantic - July 24th, 2025 [July 24th, 2025]
- Democrats Are Running Circles Around Republicans on Epstein - Politico - July 24th, 2025 [July 24th, 2025]
- Democrats Have Few Tools to Counter G.O.P. Redistricting - The New York Times - July 24th, 2025 [July 24th, 2025]
- We learned some lessons: How Chuck Schumer and Democrats are gearing up for the next funding fight with Trump - CNN - July 24th, 2025 [July 24th, 2025]
- Some Democrats may finally be ready to play dirty over redistricting - vox.com - July 24th, 2025 [July 24th, 2025]
- Democrats Havent Failed to Fight Trump. Theyve Failed to Win. - New York Magazine - July 24th, 2025 [July 24th, 2025]
- VIDEO: Blackburn Slams Democrats for Obstructing President Trumps Agenda and Will of the American People - Senator Marsha Blackburn (.gov) - July 24th, 2025 [July 24th, 2025]
- NCUA Meeting Seats In Limbo: Will Reinstated Democrats Show Up Or Sit Out? - CU Today - July 24th, 2025 [July 24th, 2025]
- Senate Democrats agree to advance military construction, VA spending bill - The Hill - July 24th, 2025 [July 24th, 2025]
- 2024: How Trump Retook the White House and the Democrats Lost America - KALW - July 24th, 2025 [July 24th, 2025]
- Opinion | Are the Democrats Dead or Alive? - The New York Times - July 22nd, 2025 [July 22nd, 2025]
- Opinion | James Carville: My Fix for the Confused and Leaderless Democrats - The New York Times - July 22nd, 2025 [July 22nd, 2025]
- One year after Biden's unprecedented exit from 2024 race, Democrats poll numbers at rock bottom - Fox News - July 22nd, 2025 [July 22nd, 2025]
- US protesters call for Democrats to face Trump and fight, fight, fight with every tool available - The Guardian - July 22nd, 2025 [July 22nd, 2025]
- 'Flood' of ICE agents is coming to cities run by Democrats, according to the White House - USA Today - July 22nd, 2025 [July 22nd, 2025]
- Pennington County Democrats host town hall discussing veterans issues - kotatv.com - July 22nd, 2025 [July 22nd, 2025]
- These Democrats could be targeted in the GOP's Texas redistricting push - Houston Chronicle - July 22nd, 2025 [July 22nd, 2025]
- Republicans and Democrats Call for More Information on Epstein Case - The New York Times - July 22nd, 2025 [July 22nd, 2025]
- Opinion | There Is Hope for Democrats. Look to Kansas. - The New York Times - July 22nd, 2025 [July 22nd, 2025]
- 'Flood' of ICE agents is coming to cities run by Democrats, White House warns - USA Today - July 22nd, 2025 [July 22nd, 2025]
- Day 1 of Texas special session starts with Democrats signaling they could flee over redistricting - ABC13 Houston - July 22nd, 2025 [July 22nd, 2025]
- Trump blames Epstein files on Democrats and Comey but the timeline tells a different story - Poynter - July 22nd, 2025 [July 22nd, 2025]
- Democrats oppose move to house immigrant detainees at Fort Dix - New Jersey Monitor - July 22nd, 2025 [July 22nd, 2025]
- The 2026 Senate map is tough for Democrats, but Republicans have their own headaches - AP News - July 22nd, 2025 [July 22nd, 2025]
- Democrats in South Carolina are barely pretending they're not already running for president - Politico - July 20th, 2025 [July 20th, 2025]
- Democrats 2024 Autopsy Is Described as Avoiding the Likeliest Cause of Death - The New York Times - July 20th, 2025 [July 20th, 2025]
- Scoop: Why Democrats didn't make Trump miss his deadline to cut $9 billion from PBS, NPR - Axios - July 20th, 2025 [July 20th, 2025]
- How can Democrats win back working-class voters? Change their tune | Joan C Williams - The Guardian - July 20th, 2025 [July 20th, 2025]
- 'Dear God': Democrats storm out of vote on controversial Trump nominee - Fox News - July 20th, 2025 [July 20th, 2025]
- POLITICS: Door Open For Democrats To Win In City Of Celina Elections - Mercer County Outlook - July 20th, 2025 [July 20th, 2025]
- Weeks After a Heat Wave Baked the US, Democrats Push to Declare Heat a Major Disaster - Inside Climate News - July 20th, 2025 [July 20th, 2025]
- Opinion | Can Anything Save the Democrats? - The Wall Street Journal - July 18th, 2025 [July 18th, 2025]
- President Says Epstein Critics Are Being Used by Democrats - The New York Times - July 18th, 2025 [July 18th, 2025]
- Mamdani charms national Democrats. But N.Y. Dems are just meh. - The Washington Post - July 18th, 2025 [July 18th, 2025]
- Trumps New Strategy on Epstein Fallout: Blame the Democrats - The New York Times - July 18th, 2025 [July 18th, 2025]
- Talking Trump accounts and mocking Democrats, Vance offers preview of how GOP will message the 'big, beautiful bill' - Politico - July 18th, 2025 [July 18th, 2025]
- Thank Fairfax County Democrats for your higher tax bill this year - Fairfax Times - July 18th, 2025 [July 18th, 2025]
- E&E News: Youth fighting Trump on climate get boost from Democrats - POLITICO Pro - July 18th, 2025 [July 18th, 2025]
- Democrats walk out of Emil Bove judicial confirmation hearing - CBS News - July 18th, 2025 [July 18th, 2025]
- John Fetterman's Approval Rating With Democrats Hits Record Low - Newsweek - July 18th, 2025 [July 18th, 2025]
- Opinion | Democrats risk taking the wrong lessons from Trumpism - The Washington Post - July 18th, 2025 [July 18th, 2025]
- Democrats Storm Out of Vote on Trumps Judicial Nominee, Emil Bove - The Daily Beast - July 18th, 2025 [July 18th, 2025]
- Democrats and Republicans in Congress are working together to pass sanctions on Russia - 90.5 WESA - July 18th, 2025 [July 18th, 2025]
- Opinion | Democrats finally found an anti-Trump argument that works - The Washington Post - July 18th, 2025 [July 18th, 2025]
- Cook County Democrats mostly sticking with incumbents on primary slate but Assessor Fritz Kaegi is in limbo - Chicago Sun-Times - July 18th, 2025 [July 18th, 2025]
- Democrats bill would require OSHA to issue worker heat protections - E&E News by POLITICO - July 18th, 2025 [July 18th, 2025]
- Trump tries to shift blame to Democrats for Epstein controversy - WGBH - July 18th, 2025 [July 18th, 2025]
- WATCH: Democrats protest Bove nomination hearing with walkout before vote - NBC New York - July 18th, 2025 [July 18th, 2025]
- Hungary opposition figures urge Democrats to organize against autocratic takeover by Trump - The Guardian - July 18th, 2025 [July 18th, 2025]
- Hunter Biden says Democrats lost election for not staying loyal to his father - The Washington Post - July 16th, 2025 [July 16th, 2025]
- 'The powerful protecting the powerful': Democrats see an opening on Epstein - Politico - July 16th, 2025 [July 16th, 2025]
- Democrats demand Pam Bondi and Kash Patel be summoned for Epstein hearing - The Guardian - July 16th, 2025 [July 16th, 2025]
- As Trump looks to net five GOP seats through Texas redistricting, Democrats grasp for response - The Texas Tribune - July 16th, 2025 [July 16th, 2025]
- Democrats are trolling Trump and the GOP over the Jeffrey Epstein case - AP News - July 16th, 2025 [July 16th, 2025]
- Democrats Broach Potential Walkout to Block Texas Redistricting - The New York Times - July 16th, 2025 [July 16th, 2025]
- Democrats Are Workshopping New Tactics After Losses of 2024 - The New York Times - July 16th, 2025 [July 16th, 2025]
- Mamdani Goes to Washington With Key Democrats in Congress Still on the Fence - THE CITY - NYC News - July 16th, 2025 [July 16th, 2025]
- Hunter Biden says Democrats lost election because they werent loyal to his father - The Hill - July 16th, 2025 [July 16th, 2025]
- Democrats bash Trump over Texas redistricting: Act of desperation to cling to power - The Hill - July 16th, 2025 [July 16th, 2025]
- Democrats raked in money in the Michigan and Illinois Senate races - Politico - July 16th, 2025 [July 16th, 2025]