Medicare, the nation’s federal health insurance program for 57 million people age 65 and over and younger people with disabilities, often plays a major role in federal health policy and budget discussions. This was the case in discussions leading up to enactment of the Affordable Care Act (ACA), which, in addition to expanding health insurance coverage, included changes to Medicare that reduced program spending. Medicare is likely to be back on the federal policy agenda as Congress debates repealing and replacing the ACA, and also if policymakers turn their attention to reducing entitlement spending as part of efforts to reduce the growing federal budget deficit and debt.
By many measures, Medicare’s financial status has improved since the ACA passed in 2010, and repealing the ACA’s provisions related to Medicare would increase program spending and worsen the financial outlook for the program. But even if the Medicare savings and revenue provisions in the ACA are retained, Medicare faces long-term financial pressures associated with higher health care costs and an aging population. To sustain Medicare for the long run, policymakers may need to consider additional program changes to modify program revenues, benefits, spending, and financing.
This brief presents 10 facts and figures about Medicare’s financial status today and the outlook for the future.