Actuarial status of the HI and SMI Trust Funds

This article presents the "Summary of the 1991 Annual Reports of the Medicare Board of Trustees." The Board reports that the present financing schedule for the Hospital Insurance (HI) program is sufficient to ensure the payment of benefits over the next 14 years with trust fund exhaustion occurring in 2005 if the alternative II (intermediate) assumptions are realized. Although the HI Trust Fund is financially adequate based on the short-range test, the Board believes that corrective action will be needed very soon to avoid the need for potentially precipitous changes later. For the Supplementary Medical Insurance (SMI) Trust Fund, the Board concludes that funds are sufficient to cover projected benefits and administrative costs through December 1991, but notes with concern the rapid growth in the cost of the program and recommends that Congress continue to work to curtail the rapid growth in the cost of the SMI program.