The 2026 Medicare Trustees Report projects that the Medicare Part A trust fund will be depleted by the second quarter of 2033, as total spending on Medicare Parts A and B reached $481 billion in 2025, with skilled nursing facility services accounting for approximately $31 billion of that total.
This is according to an analysis of the report published Wednesday by KFF News.
The report notes concerns about the financial outlook of the Medicare Part A Hospital Insurance Trust Fund, which finances inpatient hospital care, skilled nursing facility care, home health services and other Part A benefits. The Trustees project that the trust fund’s reserves will be depleted in the second quarter of 2033, one quarter earlier than projected in last year’s report. This could affect the financing of SNF services along with other Part A benefits.
According to the Trustees, the earlier depletion date is largely due to lower projected social security payroll tax revenues following changes enacted in the 2025 budget reconciliation legislation.
The report also suggests that spending on Medicare Part A services, which include inpatient hospital care and services for long-term care, including skilled nursing facility (SNF) services, has declined as a share of overall Medicare benefit spending over the past decade.
Part A accounted for 37% of total Medicare benefit spending in 2025, down from 43% in 2016, while Part B services have grown as a share of spending. This shift reflects, in part, movement of some care from inpatient to outpatient settings and growth in Part B-covered services.
Total Medicare spending on Part A and Part B benefits reached $481 billion in 2025. Of this total, SNF services accounted for 6%, or $31 billion.
Meanwhile, services covered under the Medicare Part B physician fee schedule accounted for $71 billion (15%), and the remaining $174 billion (36%) consisted of payments for all other Part A and Part B services, including 6% for SNF services.
Medicare Advantage Spending to Rise
The report also charted Medicare Advantage spending, noting that it had reached $534 billion in 2025, accounting for 53% of total Medicare spending.
MA growth was driven largely by enrollment increases as the program covered 54% of eligible beneficiaries, up from 33% in 2016.
Medicare is estimated to spend 14% more per enrollee in Medicare Advantage than in traditional Medicare, adding $76 billion in costs in 2026. Spending is projected to rise to $1.3 trillion by 2035, representing 59% of Part A and Part B spending.
