Medicare & Medicaid

All health care fast facts are from the non-partisan Congressional Budget Office (CBO) and Center for Medicare and Medicaid Services (CMS). Although they represent many of their most recent reports on this subject, they do not represent all of their reports on this subject. Occasionally minor word adjustments may have been made for clarity or to reflect the updated nature of the statement.   As always, verify and view statements in their full context as often as possible.

The new health care law includes a number of provisions that are intended, in part, to help control health care costs and to change the overall trend in health spending growth.  Many of these are specific to the Medicare program.  Verify Page 12
The expansion of Medicaid eligibility under the Affordable Care Act will broaden Medicaid’s role as part of the U.S. health care system.  Verify Page 35
Additional Federal funding provided by the American Recovery and Reinvestment Act of 2009 and the Education, Jobs, and Medicaid Assistance Act of 2010 has alleviated some pressure on the States, but it is apparent that the Medicaid program is large enough to place serious strain on many States’ budgets.   Verify Page 35
Both the expansion of eligibility for Medicaid and the provision of subsidies through new insurance exchanges will increase federal spending.   At the same time, the legislation contains various provisions that will substantially reduce spending on Medicare relative to what would have occurred under prior law.  Verify Page 8
Under the new health care law, net Medicare savings are estimated to total $575 billion for fiscal years 2010-2019.  Verify Page 8
The new health law introduced a new 3.8-percent “unearned income Medicare contribution” on income from interest, dividends, annuities, and other non-earnings sources for individual taxpayers with incomes above $200,000 and couples filing joint returns with incomes above $250,000.  Despite the title of this tax, this provision is unrelated to Medicare; in particular, the revenues generated by the tax on unearned income are not allocated to the Medicare trust funds.  Verify Page 9
Based on the estimated savings for Part A of Medicare, the assets of the Hospital Insurance (HI) trust fund would be exhausted in 2029 compared to 2017 under the prior law—an extension of 12 years.  Verify Page 9
The new health care law will improve the cash flow in the Hospital Insurance trust fund (that is, Part A of Medicare) by more than $400 billion over 10 years. Higher balances in the fund will give the government legal authority to pay Medicare benefits longer, but most of the money will pay for new programs rather than reduce future budget deficits and therefore will not enhance the government’s economic ability to Medicare benefits.  Verify here
The combination of lower Medicare Part A costs and higher tax revenues results in a lower Federal deficit based on budget accounting rules.  However, trust fund accounting considers the same lower expenditures and additional revenues as extending the exhaustion date of the [Medicare] Hospital Insurance (HI) trust fund.   In practice, the improved Medicare HI financing cannot be simultaneously used to finance other Federal outlays (such as the coverage expansions) and to extend the Medicare trust fund, despite the appearance of this result from the respective accounting conventions.   Verify Page 9
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