CHICAGO – Medicare Trustees warned today that long-term access to care for seniors is threatened by Medicare’s failure to keep up with the cost of practicing medicine, adding to the drumbeat of similar warnings from policymakers and the American Medical Association (AMA).
The Medicare Trustees report (PDF) pointed out that rising costs are outpacing physician payments. As a result, physician practices are struggling to stay open. “Absent a change in the delivery system or level of update by subsequent legislation, the Trustees expect access to Medicare-participating physicians to become a significant issue in the long term,” the report said.
“Medicare Trustees join the Medicare Payment Advisory Commission, members of Congress, medical organizations and, most importantly, patients in recognizing that this issue is affecting physician practices today. As physicians, we are trained to spot trends, but you don’t have to have a medical degree to see this one. While we are grateful for the growing consensus, the problem does not go away by merely recognizing it. Medicare reform must be the next step, and we must do it now,” said AMA President Bobby Mukkamala, M.D.
As one of the few Medicare providers without an inflationary payment update, physicians have watched their payments (when adjusted for inflation in practice costs) decline (PDF) 33% from 2001 to 2025. This year, Medicare cut payments by another 2.8 percent. These increasingly thin operating margins disproportionately affect small, independent, and rural physician practices, as well as those treating low-income or underserved communities.
The House recently passed an update for 2026 that substantially accounts for inflation and is an important step toward Medicare reform. The AMA is working to include that provision in the Senate and the final version of the reconciliation bill.
The report warned of a two-tiered medical system with the “quality of health care received by Medicare beneficiaries will, under current law, fall over time compared to that received by those with private health insurance.”
Added Dr. Mukkamala, “Medicare Trustees have clearly explained the problem: Physicians are facing high medical inflation and lowered payments. This year’s 2.8 percent cut is a painful–and ongoing–reminder that the Medicare payment system needs reform. We look forward to advancing many of our thoughts as we work on this issue with Congress and the administration in the coming year.”
The report can be found here (PDF).
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The American Medical Association is the physicians’ powerful ally in patient care. As the only medical association that convenes 190+ state and specialty medical societies and other critical stakeholders, the AMA represents physicians with a unified voice to all key players in health care. The AMA leverages its strength by removing the obstacles that interfere with patient care, leading the charge to prevent chronic disease and confront public health crises and, driving the future of medicine to tackle the biggest challenges in health care.
