Summary of the 1983 Annual Reports of the Medicare Board of Trustees

This summary presents an overview of the information contained in the annual reports of the trustees required under Title XVIII of the Social Security Act, Health Insurance for the Aged and Disabled, commonly known as Medicare. There are two basic programs under Medicare: Hospital insurance (HI), which pays for inpatient hospital care and other related care of those 65 years of age and over and of the long-term disabled. Supplementary medical insurance (SMI), which pays for physicians' services, outpatient hospital services, and other medical expenses of those 65 years of age and over and of the long-term disabled. The HI program is financed primarily by payroll taxes, with the taxes paid by current workers used to pay benefits to current beneficiaries. However, the HI program maintains a trust fund that provides a small reserve against fluctuations. This type of financing is generally known as pay-as-you-go financing. By contrast, the SMI program is financed on an accrual basis with a contingency margin. This means that the SMI trust fund should always be somewhat greater than the claims that have been incurred by enrollees but not yet paid by the program.(ABSTRACT TRUNCATED AT 250 WORDS)