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OFFICE OF THE ACTUARY

OFFICE OF THE ACTUARY. The Financial Status of Medicare July 14, 2014. Paul Spitalnic CMS Chief Actuary. Agenda. Current snapshot and evolution of the program Different views on Medicare Financial Status Formal status of trust funds Relative to other health expenditures

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OFFICE OF THE ACTUARY

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  1. OFFICE OF THE ACTUARY The Financial Status of Medicare July 14, 2014 Paul Spitalnic CMS Chief Actuary

  2. Agenda • Current snapshot and evolution of the program • Different views on Medicare Financial Status • Formal status of trust funds • Relative to other health expenditures • Relative to other federal expenditures • Q&A

  3. Medicare enrollment, benefits, and financing

  4. Medicare Sources of Non-Interest Income as % of GDP

  5. Medicare Spending by Category Total Spending = $10.8B (0.76% of GDP)

  6. Note: In 1991 there was a methodological change affecting Part B.

  7. Formal Status of Trust Funds • Evaluate HI separately from SMI • HI • Are assets plus projected income adequate to finance anticipated benefit costs? • SMI • Part B account financing set annually • Part D account draws on General Fund of the Treasury on an as needed basis • No long term solvency issues • Growing strain on federal budget

  8. Amount of deficit that would be covered by interest earnings and asset redemptions

  9. 75-year actuarial balance • Present value of income rate less cost rate • Rates compare income or costs to taxable payroll

  10. QUESTIONS ????

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