What You Actually Need to Know From the 2023 Medicare Trustees Report
July 13, 2023

Another year, another summary of the Medicare Trustees Report from the New Horizons team!

After all, it’s a few hundred pages long, and who has time for that?

Join us for all the key highlights, including the new estimated depletion date, Medicare Advantage trends, and Medicare numbers over time.

Read the full, official report from CMS: 2022 Annual Report of the Boards of Trustees of the Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds

New to the industry? Start here: Step-by-Step Guide to Getting Started In Medicare Sales

Highlights From the 2023 Medicare Trustees Report

Each year, we read the report and summarize it as briefly as we can. If you're short on time and can't read this full article, here's the gist.

Medicare Part A is expected to run out of money by 2031. (It was 2028 last year, with the prior four years being 2026.) For Medicare Part B and D, the finances are looking fine, because the premiums are set each year to cover expected costs.

The whirlwind that was COVID-19 has mostly passed, and several of the regulatory policies and legislative provisions that were enacted during it (like expanded telehealth) have since expired. In fact, actual fee-for-service per capita spending has been consistently below the pre-pandemic projections.

Medicare Advantage continues to grow – 45.9% of beneficiaries have it now, and 55.9% are expected to choose MA by 2032 (p. 159).

medicare advantage growth

If you want a little more than that, you can read some more in-depth information from the report below. Don’t worry – we’ve translated the report into layman’s terms so you can quickly understand what’s going on.

COVID-19 Effects Are Wearing Off

For the last couple of years, this report has been abnormal due to the COVID-19 pandemic. Spending shifted rapidly, and it was difficult to make accurate projections.

However, the trustees share that they expect health care spending patterns will return to pre-pandemic levels in 2024.

Healthcare Tech Is Advancing

Making cost projections is more challenging than ever because healthcare technology is moving at lightning speed. The Board explains in this report that looking out more than several decades is nearly impossible because of new interventions, procedures, and therapies.

From the completion of the human genome draft to cutting-edge cancer treatments, some incredible medical breakthroughs are changing the way conditions and diseases are treated in the 21st century.

Diseases and conditions that aren't curable or treatable today may be handled routinely in the future. While advances in healthcare have increased spending in the past, the Board is optimistic that future improvements might increase efficiency and decrease costs.

The bottom line is... well, we have no idea how costs will change as science evolves.

Medicare Numbers Over Time

It's always nice to be in-the-know, so here's a look at some Medicare enrollment and spending numbers from this year's report compared to the last six years. Bonus: you'll be awesome at Medicare trivia.


  2022 2021 2020 2019 2018 2017 2016
Medicare beneficiaries 65 million people 63.8 million people 62.6 million people 61.2 million people  59.9 million people 58.4 million people 56.8 million people
Over age 65 57.1 million 55.5 million 54.1 million 52.6 million 51.2 million 49.5 million 47.8 million
Disabled 7.9 million 8.3 million 8.5 million 8.7 million  8.8 million 8.9 million 9 million
Chose Medicare Advantage 45.9% 43% 40% 37.5%  About 36% Over 34%  Over 32%


  2022 2021 2020 2019 2018 2017 2016
Total costs $905.1 billion $839.3 billion $925.8 billion $796.2 billion $740.6 billion $710.2 billion $678.7 billion
Total income $988.6 billion $887.6 billion $899.9 billion $794.8 billion $755.7 billion $705.1 billion $710.2 billion
Income from non-interest income $980.7 billion $882.3 billion $894.6 billion $785.7 billion $745.9 billion $694.3 billion $700.4 billion
Income from interest earnings $7.9 billion $5.3 billion $5.3 billion $9.1 billion $9.8 billion $9.8 billion $9.8 billion
Assets held in special issue U.S. Treasury securities Increased by $83.4 billion to $409.1 billion Increased by $48.3 billion to $325.7 billion Decreased by $26 billion to $277.3 billion Decreased by $1.4 billion to $303.3 billion. Increased by $15.1 billion to $304.7 billion Decreased by $5 billion to $289.6 billion Increased by $31.5 billion to $294.7 billion

Part B and Part D

What has actually happened:

  • Over the last 5 years, Part B costs have averaged annual growth of 6.8%
  • Over the last 5 years, Part D costs have averaged annual growth of 4.7%

What is projected to happen over the next 5 years:

  • Part B costs will grow 9.7%
  • Part D costs will grow 6.2%
  • The GDP will grow by 4.3% over the next 5 years, which means these health care costs will be rising faster than the economy

(Info taken from Page 10.)

Medicare Advantage

Medicare Advantage continues to gain popularity, with 45.9% of Medicare beneficiaries choosing MA in 2022. That percentage is projected to continue rising until it reaches 55.9% in 2032.

The trustees share that the increases that are expected over the next 9 years are partly due to higher relative rebates that are used to lower premiums and expand benefits (page 159).

Here are a few statistical highlights from the report (page 157):

  • SNP enrollment is expected to grow by 22 percent in 2023 after increasing by 20 percent in 2022. In 2024 and later years, the enrollment growth rate for these plans is expected to slow, ranging from 12 percent in 2024 to 2 percent in 2032.
  • For LCCP-HMOs, enrollment is expected to increase by 1 percent in 2023 following growth of 3 percent in 2022.
  • For LCCP-PPOs, enrollment is expected to increase by 12 percent in 2023 after growth of 13 percent in 2022.
  • During the period 2020 through 2025, enrollment in the “Other” category is expected to decrease by 53 percent as a result of the expiration of the Medicare-Medicaid plan (MMP) contracts; for most years in 2026 and later, it is expected to grow more steadily at a rate of 2 to 3 percent.

medicare advantage plan types

Estimated Depletion Date

The Trustees still agree that there’s just not enough money to keep funding Medicare.

They estimate that the depletion date for the HI trust fund is 2031, three years later than last year's projection. (To clarify, the HI trust fund is what funds Medicare Part A. Parts B and D are funded separately by the SMI trust fund.)

2023 HI Trust Fund Balance at Beginning of Year as a Percentage of Annual Expenditure

(Image taken from Page 30.)

Medicare Cost Projections

The report is still really cautious, with tons of disclaimers basically saying that anything can happen despite all these projections: “There is substantial uncertainty in the economic, demographic, and health care projection factors for HI trust fund expenditures and revenues” (Page 30). In fact, the report says that every year.

But still… things aren’t looking that great for Medicare.

The trustees explain that the changes that need to happen to eliminate the deficit are pretty extreme. They give two options (page 33):

  1. Payroll tax needs to increase immediately from 2.90% to 3.52%.
  2. Expenses need to be reduced immediately by 13% (it was 15% last year, so we're moving in the right direction).

They do say that the changes could happen gradually, but they'd have to be higher in that case compared to just doing it immediately. 

In other words, Medicare needs to balance the checkbook, and there are only two ways to do it – get more coming in or spend less. Both of which are difficult to do.

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