Part C, Medicare Advantage (MA), provides private plan options, such as managed care, for beneficiaries who are enrolled in both Part A and Part B. Part D provides optional outpatient prescription drug coverage. The Medicare program has two separate trust funds—the Hospital Insurance (HI) Trust Fund and the Supplementary Medical Insurance (SMI) Trust Fund. The Part A program, which is financed mainly through payroll taxes levied on current workers, is accounted for through the HI Trust Fund. The Part B and Part D programs, which are funded primarily through general revenue and beneficiary premiums, are accounted for through the SMI Trust Fund. Both funds are maintained by the Department of the Treasury and overseen by the Medicare Board of Trustees, which reports annually to Congress concerning the funds' financial status. From its inception, the HI Trust Fund has faced a projected shortfall and eventual insolvency. Additional income to the HI Trust Fund consists of premiums paid by voluntary enrollees who are not entitled to premium-free Medicare Part A through their (or their spouse's) work in covered employment, a portion of the federal income taxes paid on Social Security benefits, and interest on federal securities held by the HI Trust Fund. The HI Trust Fund is a financial account in the U.S. Treasury into which all income to the Part A portion of the Medicare program is credited and from which all benefits and associated administrative costs of the Part A program are paid. The insolvency date has been postponed a number of times since the beginning of Medicare through various methods. Current Insolvency Projections

In their 2018 report, the Medicare trustees projected a worsened short-term outlook for the HI Trust Fund and therefore moved the insolvency date three years earlier than their 2017 estimate, to 2026 (from 2029 in the 2017 report).
Medicare is the nation's health insurance program for persons aged 65 and older and certain disabled persons. Medicare consists of four distinct parts: Part A (Hospital Insurance, or HI); Part B (Supplementary Medical Insurance, or SMI); Part C (Medicare Advantage, or MA); and Part D (the outpatient prescription drug benefit).
The Part A program is financed primarily through payroll taxes levied on current workers and their employers; these taxes are credited to the HI Trust Fund. The Part B program is financed through a combination of monthly premiums paid by current enrollees and general revenues. Income from these sources is credited to the SMI Trust Fund. As an alternative, beneficiaries can choose to receive all their Medicare services through private health plans under the MA program; payment is made on beneficiaries' behalf in appropriate parts from the HI and SMI Trust Funds. The Part D drug benefit is funded through a separate account in the SMI Trust Fund and is financed through general revenues, state contributions, and beneficiary premiums. The HI and SMI Trust Funds are overseen by the Medicare Board of Trustees, which makes an annual report to Congress concerning the financial status of the funds.
From its inception, the HI Trust Fund has faced a projected shortfall. The insolvency date has been postponed a number of times, primarily due to legislative changes that have had the effect of restraining growth in program spending. The 2018 Medicare Trustees Report projects that, under intermediate assumptions, the HI Trust Fund will become insolvent in 2026, three years earlier than estimated in the prior year's report.