The Medicare Trust Fund Just Got a New Expiration Date — and Nursing Homes Could Feel the Squeeze

Washington, D.C. — Medicare’s hospital insurance trust fund is now projected to run dry in 2033, a full quarter earlier than previously estimated, according to the 2026 Medicare Trustees Report released earlier this month. For skilled nursing facilities that depend heavily on Medicare Part A reimbursement, the timeline carries real implications.

The trustees pointed to changes in the 2025 budget reconciliation bill as the primary driver behind the accelerated depletion date. Lower-than-expected Social Security tax revenue — one of the main funding sources for Part A — has reshaped the program’s financial outlook.

Nursing home spending through Medicare reached approximately $31 billion in 2025, representing about 6% of total Part A and Part B benefit payments in traditional Medicare. While that figure may seem modest compared to the $159 billion spent on inpatient hospital services, the dependency is significant for an industry already navigating tight margins.

The report also highlighted a broader shift in how Medicare dollars are being allocated. Medicare Advantage now accounts for over half of total Part A and Part B spending — $534 billion in 2025, up from just $189 billion in 2016. That growth is tied to rising enrollment, but also to higher per-enrollee payments estimated at 14% above traditional Medicare costs.

For nursing home operators, the looming trust fund depletion raises questions about future reimbursement stability. If reserves are fully depleted without congressional action, Medicare would lack sufficient funds to cover full Part A benefits without revenue increases or spending cuts. Industry observers note that similar projections in past years have prompted legislative fixes, but the political path forward remains uncertain.

The trustees also projected rising out-of-pocket costs for beneficiaries. The Part B premium is expected to increase from $203 to $210 monthly in 2027, while the Part A hospital deductible would rise from $1,736 to $1,788. Those increases could affect nursing home residents directly, particularly those in traditional Medicare.

Perhaps most relevant to the sector is the report’s finding on spending distribution. Services covered under the Medicare Part B physician fee schedule accounted for $71 billion in 2025, while skilled nursing facility services represented a smaller but critical share. As financial pressures facing operators continue to mount, the timing of any trust fund remedy could shape the industry’s trajectory over the next decade.

The Medicare Trustees Report is issued annually and provides Congress with the data needed to evaluate the program’s long-term sustainability. With 2033 now the projected cliff, policymakers will face increasing pressure to act — and nursing home stakeholders will be watching closely.