Medicare Trustees Report Confirms MACRA Saves $3 Trillion for Taxpayers

On Wednesday, the Social Security and Medicare Trustees reports were released for 2015.

On the Medicare side, the report confirms a score that the Center for Medicare Services (CMS) released back in the spring of 2015 when Congress was considering H.R. 2, the “Medicare Access and CHIP Reauthorization Act (MACRA).” In the report, CMS said:

"Over the 75-year period, the actuarial deficit would be reduced from the current-law estimate of 0.87 percent of taxable payroll to 0.78 percent under H.R. 2. Similarly, the present value of future Part A benefits would decrease by $387 billion—from $20.365 trillion to $19.978 trillion…

Overall, the 75-year present value of Part B spending under H.R. 2 is $0.04 trillion less than the Trustees’ current-law projection of $21.847 trillion and $2.5 trillion less than the projected baseline projection of $24.311 trillion."

To sum up, the CMS actuarial score of H.R. 2 projected that $387 billion would be reduced from Medicare’s Part A (Hospital Insurance) unfunded liability, and $2.5 trillion would be reduced from Medicare’s Part B (doctor visits) unfunded liability. Put those together, and you have a reduction in the present value of Medicare’s unfunded liabilities of nearly $3 trillion.

Considering Medicare’s unfunded liability before MACRA was nearly $45 trillion, a $3 trillion reduction is a modest but nonetheless very real improvement to system finances. Certainly most conservatives, if asked whether they would like to pass a bill which reduces the overspending in Medicare by $3 trillion without raising taxes, should say yes.