Hospital Insurance Trust Fund

The Hospital Insurance Trust Fund (HI Trust Fund) is a federal trust fund that finances Medicare Part A, which covers hospital and related inpatient care. The HI Trust Fund is financed by payroll taxes paid by workers and their employers. The HI Trust Fund is projected to be depleted by 2026.

The HI Trust Fund is one of two trust funds that finance Medicare. The other trust fund is the Supplementary Medical Insurance Trust Fund (SMI Trust Fund), which finances Medicare Part B, which covers physician and outpatient services. The SMI Trust Fund is financed by premiums paid by Medicare beneficiaries, general revenues, and interest income.

The HI Trust Fund is a separate legal entity from the U.S. Treasury. The HI Trust Fund has its own assets and liabilities, and it is managed by the U.S. Department of the Treasury. The HI Trust Fund is not subject to the same budget rules as the rest of the federal government.

The HI Trust Fund is projected to be depleted by 2026. This means that the HI Trust Fund will not have enough money to pay for all of the hospital and related inpatient care that Medicare beneficiaries are entitled to. If the HI Trust Fund is depleted, Medicare beneficiaries may have to pay higher premiums or deductibles, or they may have to receive less hospital and related inpatient care.

There are a number of proposals to address the HI Trust Fund's projected depletion. Some proposals would increase the payroll taxes that workers and their employers pay. Other proposals would reduce the amount of hospital and related inpatient care that Medicare covers. There is no consensus on which proposal is the best way to address the HI Trust Fund's projected depletion.