Medicare and Medicaid:

Updated Effects of Recent Legislation on Program and Beneficiary Costs

HRD-88-85: Published: Jul 26, 1988. Publicly Released: Aug 2, 1988.

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Pursuant to a congressional request, GAO discussed the effects of legislation since 1980 on Medicare and Medicaid program costs and on beneficiary out-of-pocket costs.

GAO did not attempt to quantify Medicare cost changes attributable to the major legislative changes because of the numerous interrelated factors affecting Medicare costs. GAO estimated that, if prior cost growth trends had continued, actual inflation-adjusted Medicare costs, from 1981 through 1986, would have been $17.3 billion more than the actual total of $251 billion. GAO found that the Medicaid cost growth rate, partly in response to legislation, decreased to 8 percent in 1982 and increased from 1983 through 1986. GAO also found that: (1) legislative changes increased the average out-of-pocket cost per Medicare member for part A hospital insurance services by about 73 percent and part B supplementary hospital insurance services by about 36 percent; and (2) as of December 1986, 28 states and the District of Columbia had increased cost-sharing requirements for Medicaid recipients as a result of 1982 legislation.

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