Anniversaries are a time to celebrate accomplishments. They are also a time to take stock. As Medicare turns 61 this month, we should do both.

Start with the celebration, because it is deserved. When Lyndon Johnson signed Medicare into law on July 30, 1965, only about half of Americans over 65 had hospital insurance and nearly a third lived in poverty. Growing old in this country carried a real risk of being sick and broke at the same time. Today, coverage for older Americans is essentially universal, and 69 million people depend on the program. It is one of the most successful things our government has ever done — and I say that as someone who spends most of my working hours cataloging things our government does badly.

Now the taking stock, which is harder. Medicare has two major problems: the part of Medicare that can run out of money is about to, and the part that can’t is quietly taking over the federal budget.

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First the basics. Most Americans believe they prepaid for Medicare through a lifetime of payroll taxes. It is a reasonable belief. It is wrong.

All in, payroll taxes, premiums, and other dedicated receipts cover only about half of what Medicare costs. Part A, hospital insurance, is the only part of Medicare financed by the payroll tax, through contributions to the Hospital Insurance trust fund. Parts B and D are not. By statute, beneficiary premiums are set to cover roughly a quarter of those costs — in practice they covered about 22% last year — and general revenue covers nearly all the rest. Because Washington borrows heavily, a meaningful share of that general revenue is actually debt.

The more pressing problem is that the Hospital Insurance trust fund is going to run out of money. Because it has a fixed revenue source rather than an annual top-up from the Treasury, depletion triggers automatic cuts in what Medicare can pay providers. The trustees put depletion in the second quarter of 2033; the Congressional Budget Office’s assumptions stretch it to 2040. Under the trustees’ timeline, incoming payroll taxes would then cover 89% of scheduled Part A benefits — an immediate 11% cut in what Medicare pays hospitals.

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Seniors’ benefits are not what gets cut. The hospitals they depend on are, and some hospitals, particularly in rural and underserved parts of the country, already operate on an extremely thin margin. The trustees price out the fixes as well, for 75-year solvency: raise the Medicare payroll tax from 2.9 to 3.46% today, cut Part A provider reimbursements by 12% today, or blend the two. Waiting does not make that menu easier or cheaper.

Meanwhile, the overall cost of the program is projected to balloon. Medicare spent about $1.2 trillion last year. The trustees project roughly $2.5 trillion by 2035 — a climb from 3.9% of the entire American economy today toward 6.5% by 2050. Part of that is demographic: 4.5 workers paid in for every beneficiary at the program’s start, and fewer than three do today. But the larger driver is the cost of caring for each individual beneficiary, which is growing faster than the economy that funds it. In the Congressional Budget Office’s latest outlook, enrollment growth adds 20 percentage points to Medicare’s spending growth over the coming decade, while rising cost per beneficiary adds 41.

That is what the second problem looks like from inside the federal budget. Over the next decade, Medicare will be the single largest source of growth in federal spending other than interest on the national debt. Every other major federal health program shrinks as a share of the economy. Medicare does not.

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None of this is a surprise to anyone in Washington. The Medicare trustees have formally notified Congress and the president, in writing, nine years running — and Congress and the president have done nothing.

In 2003, Congress built itself an alarm system to warn when Medicare spending and revenues were getting dangerously out of balance. If the trustees ever project that general revenues — not payroll taxes, not premiums, but the government’s ordinary tax dollars — will have to cover more than 45% of Medicare’s costs within seven years, they are required to say so formally. Two such determinations in a row trigger a “Medicare funding warning.” And the warning is not advisory. By statute, the president must send Congress remedial legislation within 15 days of his next budget, and Congress must take it up on an expedited basis.

The trustees issued that warning again in June. And this year the 45% line is not crossed somewhere out in the seven-year window. It is crossed now, in fiscal 2026, the first year of the projection.

Exactly one president has ever answered the letter. That was in 2008. No legislation responding to any of these warnings has ever been enacted.

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The answer is not simply a bigger check or a smaller one. Medicare’s finances will need both additional revenue and slower cost growth, because neither alone closes the gap — and slower cost growth means confronting what actually drives spending per beneficiary, including how we pay providers, what we pay for drugs, and what we pay for Medicare Advantage plans. Protecting Medicare and practicing fiscal responsibility are not competing goals. They are the same goal.

None of this is easy, and governing was never supposed to be easy. But we have now spent nine years treating a statutory alarm as background noise. Medicare has kept its promise for 61 years because the people who built it were willing to do hard arithmetic in public. The best birthday present we could give it is to heed the warning and do the math.