Medicare Faqs

Can the Supplementary Medical Insurance (SMI) Trust Fund, Which Finances Parts B and D, Become Insolvent?
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The Supplementary Medical Insurance (SMI) Trust Fund cannot become insolvent because it always has sufficient financing to cover Parts B and D costs. Government allocations are specifically set at levels to assure that SMI cannot go “bankrupt.”

The SMI Trust Fund consists of two separate accounts — one for Part B, which pays for physician and other outpatient health services, and one for Part D, which pays for outpatient prescription drugs. Premiums for Part B and Part D are set each year at levels that cover about 25 percent of costs; general revenues pay the remaining 75 percent of costs.

The 2012 Medicare Trustees report projects 2024 as the insolvency date for the Hospital Insurance (HI) Trust Fund, which covers Part A expenses. This projection does not apply to the SMI Trust Fund.

RELATED FAQs

Why Is There So Much Discussion About the Solvency of Medicare?
Is the Hospital Insurance (HI) Trust Fund, Which Finances Part A, Expected to Run Out of Money?
Who Determines the Financial Solvency of the Hospital Insurance (HI) Trust Fund?
What Happens if the Hospital Insurance (HI) Trust Fund, Which Finances Part A Services, Becomes Insolvent?
What Is the Medicare Solvency Trigger?
What Is the Medicare Funding Warning?
What Happens When a Medicare Funding Warning Is Issued?




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