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GAO Identifies Fiscal Sustainability Concerns with Medicare and Other Trust Funds

Many federal programs, including Medicare and Social Security are funded through trust funds and other dedicated funds. Medicare is funded through the Federal Hospital Insurance Trust Fund and the Federal Supplementary Medical Insurance Trust Fund. The Government Accountability Office (GAO) was asked to review issues related to federal trust funds. In its report the GAO found that several major federal trust fund programs – including Social Security and Medicare – are on an unsustainable course.

The GAO found that trust funds are projected to start decreasing in Fiscal Year 2022. If no action is taken, these trust funds are projected to be unable to fully support paying their projected obligations in future years. The GAO notes that to change the long-term fiscal path, policymakers will likely need to consider policy changes to the entire range of federal activities, both revenue and spending. Because Medicare and other programs funded through these trust funds are entitlement programs, legislative changes would be necessary.

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About this Author

Sheila Madhani, Senior Director, McDermott Consulting
Senior Director

Sheila advises clients on a wide variety of Medicare payment and regulatory issues. With more than 10 years of experience, Sheila is highly skilled in the areas of Medicare physician and hospital outpatient payment, Medicare quality programs, and the establishment and valuation of CPT® codes. Sheila has a deep understanding of emerging technology’s impact on Medicare reimbursement. She has facilitated relationships and discussions with physician specialty societies and industry stakeholders, helping to develop mutually beneficial collaborations. Sheila also has guided...

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