Trustees Issue 2026 Annual Reports

Each year the Social Security and Medicare Trustees issue updated reports on the trust fund status for these two programs. The 2026 reports released on June 9, 2026. Social Security and Medicare both face long-term financial shortfalls under the current level of benefits payable to beneficiaries. Changes are needed to both programs because costs continue to rise, and the rapid aging of the population will require more Medicare services. Even with these funding issues, Social Security is still a stable source of income for keeping many retirees out of poverty and Medicare is still the base of healthcare protection.

You can look at the summary table to see many of the 2026 Social Security and Medicare figures along with the 2027 projections. The actual 2027 figures release in the fall.

 

What is the 2027 projection for Social Security?

The Social Security projection is that reserves will last until 2034, with 83% of benefits still payable at that time — the same year as in the 2025 report. This means that in less than eight years, the trust fund reserves that have been saving up through the years will be gone in 2034. After this date, payroll taxes will be the only source for benefit payments.

The cost for the Social Security program was more than the tax revenues collected (including interest) and will continue throughout the long-range period. The shortfall in revenue and cost growth is mostly due to the rising number of beneficiaries as the baby-boom generation retires, lower birth rates (resulting in fewer workers), and people living longer.

Currently there are 2.6 covered workers for each beneficiary (was about 5 to 1 in 1960) decreasing to 2.4 covered workers by 2035 when most baby boomers will have retired. To prevent the shortfall, more money needs to be put into the system, or benefits need to be cut.

The program covered about 185 million workers in 2025. About 70 million people were receiving monthly Social Security benefits at the end of 2025 — totaling about $1.6 trillion in payments. Administrative costs were a very low 0.4% of total expenses in 2025.

 

What is the 2027 projection for Medicare?

The projection for Medicare Part A Hospital Insurance (HI) is that it will remain solvent until 2033, the same as the prediction in last year’s report.

In 2033, dedicated revenues will be able to pay 89% of HI costs, dropping to 85% in 2050, and then increasing back to about 93% in 2100 (the end of the projection period). Health care reform is an important tool to control costs, provide physician incentives, and prevent fraud. Work still needs to occur to guarantee the future of Medicare and historically, Congress has always taken action to prevent the depletion of these assets.

The Part A program pays benefits for inpatient hospital and other care. In 2026, the program covered about 69.3 million people (62.2 million age 65 or older and 7.1 million long-term disabled people under age 65). About 51% of HI beneficiaries have enrolled in Part C private health plans that contract with Medicare to provide Part A and Part B health services.

HI is financed primarily by payroll taxes from about 188.7 million covered workers in 2025, which includes some government workers who pay the HI tax only. The initial hospital inpatient deductible for 2027 is projected to be $1,788 ($1,736 in 2026). See the summary table for other relevant figures.

The Part B program pays benefits for physician services, outpatient hospital services, and certain other medical expenses for the aged and disabled who have voluntarily enrolled. The Part D program is a voluntary outpatient prescription drug benefit. Because of the automatic financing provisions for Parts B and D, this trust fund is expected to be adequately financed into the indefinite future.

The Part B monthly premium is projected to be $209.50 in 2027. The “hold-harmless” provision in the law can cause the Part B premium rate for some current enrollees who have their premiums deducted from their Social Security benefit limited to the dollar increase in the Social Security benefit. New and high-income Medicare beneficiaries and those whose Medicare premium is paid by Medicaid would pay the new year’s premium. The Part D base monthly premium in 2027 is estimated to be about $41.33.

Several key 2027 Part D limits were released by the Centers for Medicare and Medicaid Services on April 6, 2026, for certain retiree drug subsidy purposes. The catastrophic threshold is indexed by program growth. See the summary table for the key Part B and Part D figures including the projected premiums for high-income beneficiaries.

Summary Table

 

Social Security	2026	Projected 2027
Cost-of-living Adjustment (COLA) for December (payable in January).	2.8% (12/25)	2.7% (12/26)
FICA tax rate:
Social Security for employees.	6.20%	6.20%
Medicare (Hospital Insurance). An additional FICA tax of 0.9% applies to high-income beneficiaries with annual incomes above $200,000 ($250,000 for married couples filing jointly). The employer does not pay this additional percentage.	1.45%	1.45%
Maximum Social Security earnings for tax contributions and benefits.	$184,500	$190,200
Medicare taxable earnings.	no limit	no limit
Earnings required to earn one credit (maximum of four credits per year).	$1,890	$1,950
Retirement Earnings Test exempt amounts:
Under full retirement age (FRA) throughout year.	$24,480	$25,200
Reaches FRA in year (period before the month FRA is attained).	$65,160	$67,200
FRA and over.	no limit	no limit
Maximum monthly retirement benefit at FRA.	$4,152	n/a

Medicare Part A (Hospital Insurance)	2026	Projected 2027
Part A inpatient deductible per benefit period.	$1,736	$1,788
Part A daily coinsurance 61st through 90th days.	$434	$447
Part A daily coinsurance for up to 60 “lifetime reserve” days.	$868	$894
Part A daily coinsurance 21st through 100th days in a skilled nursing facility.	$217	$223.50
Part A voluntary monthly premium if not eligible for premium-free Part A.	$565	$600
Part A reduced monthly premium for persons with 30 to 39 credits.	$311	$330

Medicare Part B (Medical Insurance)	2026	Projected 2027
Part B annual deductible.	$283	$292
Part B (Medical Insurance) standard monthly premium for most current, new, and high-income Medicare beneficiaries, and people whose Medicare premium is paid by Medicaid.	$202.90	$209.40
Part B (Medical Insurance) standard monthly premium:*
File an Individual Tax ReturnFile a Joint Tax Return
0 to $109,000 annual income  0 to $218,000 annual income	$202.90	$209.40
$109,001 to $137,000       $218,001 to $274,000	$284.10	$293.10
$137,001 to $171,000            $274,001 to $342,000	$405.80	$418.80
$171,001 to $205,000                          $342,001 to $410,000	$527.50	$544.50
$205,001 to $499,000                        $410,001 to $749,999	$649.20	$670.10
$500,000 or more           $750,000 or more	$689.90	$712.00
*Income brackets for beneficiaries based on their 2024 federal income tax return filing status and adjusted gross income in 2026 (2025 returns for 2027 with new income thresholds)

Medicare Part D (Prescription Drug Coverage)	2026	Projected 2027
Part D (Prescription Drug Coverage) monthly premium (estimate).	$34.50	$41.33
Part D monthly premium adjustment for high-income beneficiaries (paid to Medicare):*
File an Individual Tax Return File a Joint Tax Return
0 to $109,00 annual income  0 to $218,000 annual income	$0	$0
$109, 001 to $ 137,000 $218,001 to $274,000	+ $14.50	+ $15.40
$137,001 to $171,000  $274,001 to $342,000	+ $37.50	+ $39.70
$171,001 to $205,000  $ 342,001 to $410,000	+ $60.40	+ $64.00
$205,001 to $499,000   $410,001 to $749,999	+ $83.30	+ $88.30
$500,000 or more   $750,000 or more	+$91.00	+ $96.40
*Income brackets for beneficiaries based on their 2024 federal income tax return filing status and adjusted gross income in 2026 (2025 returns for 2027 with new income thresholds).

2027 Part D Figures Released April 6, 2026	2026	Actual 2027
Part D deductible.	$615	$700
Part D catastrophic threshold.	$2,100	$2,400

 

New legislation is needed for the Medicare program to ensure that the growing number of beneficiaries have the health care benefits they need in the next 50 years. Part A could be brought into balance over the next 75 years by one or a combination of the following options:

• An immediate increase in the payroll tax from 2.9% to 3.46%.
• An immediate 12% reduction in expenses.

These changes could be made gradually but would ultimately have to be at a higher level to eliminate the deficit. Parts B and D are adequately financed because premiums and general revenue income are set each year to cover expected costs.

For the long-term stability of the Social Security and Medicare programs, lawmakers need to look at the policy options to reduce or eliminate the shortfalls in both programs. For changes to be spread over more generations, action needs to be taken now rather than later. With informed decisions and new legislation, Social Security and Medicare can continue to protect future generations.