Chapter 2: Medicare

Issues: Medicare

Medicare is a nationwide health insurance program for the aged and certain disabled persons. Medicare consists of four distinct parts: Part A (Hospital Insurance, or HI); Part B (Supplementary Medical Insurance, or SMI); Part C (Medicare Advantage, or MA); and Part D (the prescription drug benefit). The program is administered by the Centers for Medicare & Medicaid Services (CMS). According to the Congressional Budget Office, total program outlays are estimated to reach about $714 billion in fiscal year 2018. Net federal outlays, after deduction of beneficiary premiums and other offsetting receipts, are expected to be close to $590 billion in 2018.

Medicare is administered by CMS within the U.S. Department of Health and Human Services (DHHS). Day-to-day program operations, including processing benefits and paying claims, are conducted by private Medicare contractors.

Congressional Research Service (CRS) Reports

For more programmatic information, please see reports published by the Congressional Research Service.

CRS works exclusively for the United States Congress, providing policy and legal analysis to Committees and Members of both the House and Senate, regardless of party affiliation.

Legislative History

The following provides a brief legislative history for Medicare from the prior Green Book through most of the 115th Congress. For prior legislative history, please see prior editions of the Green Book.

The summary highlights major legislation; it is not a comprehensive list of all Medicare or health related tax amendments. Included are provisions that had a significant budget impact, changed program benefits, modified beneficiary cost sharing, or involved major program reforms. Provisions involving policy changes are mentioned the first time they are incorporated in legislation, but not necessarily every time a modification is made.

Disaster Tax Relief and Airport and Airway Extension Act of 2017 (P.L. 115-62)

Amended the Medicare IVIG Access and Strengthening Medicare and Repaying Taxpayers Act of 2012 to extend through 2020 the Medicare Patient Intravenous Immunoglobulin (IVIG) Demonstration Project to provide payments to Medicare beneficiaries for items and services needed for the in-home administration of IVIG for the treatment of primary immune deficiency diseases.

Bipartisan Budget Act of 2018 (P.L. 115-123)

  • Permanently repealed the Medicare payment cap for therapy services;
  • Permanently removed the rental cap for durable medical equipment under Medicare with respect to speech generating devices;
  • Permanently extended the Special Needs Plans in Medicare Advantage;
  • Provided a 2 Year Extension of Important Medicare Policies, including Geographic Practice Cost Index (GPCI) floor which boosts payments for the work component of physician fees in areas where labor cost is lower than the national average;
  • Extended funding for quality measure endorsement, input, and selection;
  • Extended, without modification, the Medicare-Dependent Hospital and Low-Volume Hospital programs.
  • Included 5-year extensions of the Home Health rural add-on payment, and ground ambulance add-ons;
  • Included a 2 year extension of FQHCs (Community Health Centers), community-based, patient-centered organizations that provide comprehensive health services to medically underserved populations, regardless of their ability to pay;
  • Included the CHRONIC Care Act, The Part B Improvement Act and a number of additional policies.
  • Retained a premise that industries that benefit from payment increases should not shift the costs of paying for those benefits on to others. These policies included:
    • Modified payments for early discharges to hospice care;
    • Adjusted home health market basket payment updates;
    • Reduced outlays for non-emergency ESRD ambulance transports;
    • Extended the target for relative value adjustments for misvalued codes;
    • Delayed the HHS Secretary’s authority to terminate contracts for certain Medicare Advantage plans;
    • Adjusted payment for outpatient physical and occupational therapy services furnished by a therapy assistant;
    • Modified long-term care hospital payments; and
    • Sunset the exclusion of biosimilars from Medicare part D coverage gap discount program.

Know the Lowest Price Act of 2018 (P.L. 115-262)

Prohibits a prescription drug plan under Medicare or Medicare Advantage from restricting a pharmacy from informing an enrollee of any difference between the price, copayment, or coinsurance of a drug under the plan and a lower price of the drug without health-insurance coverage. (Such restrictions are commonly referred to as gag clauses.)

Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities Act or the SUPPORT for Patients and Communities Act (P.L. 115-271)

  • Exempting substance use disorder telehealth services from specified requirements,
  • Requiring the initial examination for new enrollees to include an opioid use disorder screening,
  • Modifying provisions regarding electronic prescriptions and post-surgical pain management,
  • Requiring prescription drug plan sponsors to establish drug management programs for at-risk beneficiaries, and
  • Requiring coverage for services provided by certified opioid treatment programs.


This page was prepared November 2018 for the 2018 version of the House Ways and Means Committee Green Book.