Triggering a policy response to the Medicare funding warning

Architect of the Capitol

Article Highlights

  • #Medicare will fall short of its promises without reform

    Tweet This

  • Until the legislators take into account the long-term consequences of short-term policy, we won't know if #Medicare can be saved

    Tweet This

  • Congress has been warned for many years that #Medicare faces unprecedented fiscal pressures as the baby boom generation retires

    Tweet This

Read the testimony as an Adobe Acrobat PDF

Thank you, Chairman Gowdy, Ranking Member Davis, and members of the Subcommittee for the opportunity to speak today on Medicare's financial status and the need for a policy response to the funding warning issued by Medicare's Trustees in their most recent report.

I am Joseph Antos, the Wilson H. Taylor Scholar in Health Care and Retirement Policy at the American Enterprise Institute (AEI), a non-profit, non-partisan public policy research organization based in Washington, D.C. I am also a member of the panel of health advisers for the Congressional Budget Office (CBO), and I was formerly the Assistant Director for Health and Human Resources at CBO. My comments today are my own and do not necessarily reflect the views of AEI, CBO, or other organizations with which I am affiliated.

"Medicare will not be able to fulfill its promises to future generations of seniors without significant changes in policy." -- Joseph Antos

Because of Medicare's complicated structure, it can be difficult to ascertain fully the program's financial status. The date at which the Hospital Insurance (HI, or Part A) trust fund is exhausted is one easily-understood indicator but it focuses on only a portion of Medicare that accounts for less than half of program spending. Congress established a trigger mechanism known as the Medicare funding warning that reflects the combined financial condition of all parts of the program. It was intended to call attention to imbalances between Medicare spending and revenue specifically dedicated to fund the program. In the event of a funding warning, the President is required to present legislative proposals to Congress that would reduce program spending or increase program revenue (or both).

A Medicare funding warning has been declared by the Trustees every year since 2007. President George W. Bush responded by sending a proposal to Congress on February 15, 2008, but Congress failed to act on it.1 In each of his first three years in office, President Barak Obama has failed to respond to the funding warning.

It is essential that the president heed the clear evidence presented by his board of Trustees that Medicare's ability to finance the promises made to America's seniors is in jeopardy. It is equally essential that Congress act to shore up Medicare's finances, whether or not the president presents his own plan.

Joseph R. Antos is the Wilson H. Taylor Scholar in Health Care and Retirement Policy at AEI.


Also Visit
AEIdeas Blog The American Magazine
About the Author


  • Joseph Antos is the Wilson H. Taylor Scholar in Health Care and Retirement Policy at the American Enterprise Institute (AEI), where his research focuses on the economics of health policy — including the Affordable Care Act, Medicare, the uninsured, and the overall reform of the health care system and its financing. He also studies the impact of health care expenditures on federal budget policy.

    Before joining AEI, Antos was assistant director for health and human resources at the Congressional Budget Office (CBO). He has also held senior positions in the US Department of Health and Human Services, the Office of Management and Budget, and the President’s Council of Economic Advisers. He recently completed a seven-year term as health adviser to CBO, and two terms as a commissioner of the Maryland Health Services Cost Review Commission. In 2013, he was also named adjunct associate professor of emergency medicine at George Washington University.

    Antos has a Ph.D. and an M.A. in economics from the University of Rochester and a B.A. in mathematics from Cornell University.

    Follow Joseph Antos on Twitter.

  • Phone: 202-862-5938
  • Assistant Info

    Name: Neil McCray
    Phone: 2028625826

What's new on AEI

image The Census Bureau and Obamacare: Dumb decision? Yes. Conspiracy? No.
image A 'three-state solution' for Middle East peace
image Give the CBO long-range tools
image The coming collapse of India's communists
AEI on Facebook
Events Calendar
  • 21
  • 22
  • 23
  • 24
  • 25
Wednesday, April 23, 2014 | 12:00 p.m. – 1:30 p.m.
Graduation day: How dads’ involvement impacts higher education success

Join a diverse group of panelists — including sociologists, education experts, and students — for a discussion of how public policy and culture can help families lay a firmer foundation for their children’s educational success, and of how the effects of paternal involvement vary by socioeconomic background.

Thursday, April 24, 2014 | 12:00 p.m. – 1:30 p.m.
Getting it right: A better strategy to defeat al Qaeda

This event will coincide with the release of a new report by AEI’s Mary Habeck, which analyzes why current national security policy is failing to stop the advancement of al Qaeda and its affiliates and what the US can do to develop a successful strategy to defeat this enemy.

Friday, April 25, 2014 | 9:15 a.m. – 1:15 p.m.
Obamacare’s rocky start and uncertain future

During this event, experts with many different views on the ACA will offer their predictions for the future.   

No events scheduled today.
No events scheduled this day.
No events scheduled this day.
No events scheduled this day.
No events scheduled this day.