# Medicare **OMB budget function 570** — the federal health-insurance program for Americans 65+ and certain disabled people, created alongside Medicaid by the [[Medicare and Medicaid Act]] of 1965. **~$1.0 trillion in FY2025** (function 570, net of premiums), and the **fastest-growing** of the big four (+14% year-over-year), driven by medical inflation and an aging population. Like [[Social Security]], it is mandatory spending set by formula, not annual appropriations (see [[Discretionary vs Mandatory Spending]]). ## Structure - **Part A** (hospital) is financed by a dedicated payroll tax and the Hospital Insurance trust fund; **Parts B** (physician) and **D** (drugs) are funded mostly from general revenue plus premiums. The HI trust fund faces a projected shortfall in the early-to-mid 2030s. - The gross Medicare number is larger than the net function figure; offsetting premium collections bring it down to the ~$1.0T net line. ## The RWKB angle Medicare is the second rail of entitlement politics. The drug-pricing provisions of the [[Inflation Reduction Act]] (Medicare negotiation) became a partisan flashpoint; the [[Big Beautiful Bill]] and the [[Project 2025]] blueprint touch Medicare Advantage and provider payments. The persistent tension: Medicare's cost growth is the single biggest long-run driver of federal spending, but proposing structural cuts ("premium support," vouchers, raising the eligibility age) is electorally radioactive, so most "savings" are routed through provider-payment changes that are less visible to voters. Watch the gap between projected cost growth and what any [[President's Budget Request]] actually proposes. ## Related - [[Medicare and Medicaid Act]] · [[Medicaid]] · [[Social Security]] - [[Inflation Reduction Act]] · [[Discretionary vs Mandatory Spending]] · [[Budget Functions]] - [[Federal Budget FY2025]] · [[Budget Hub]] ## The October 2026 Part B Payments On the night of **Friday, October 2, 2026**, [[Donald Trump]] announced one-time payments of **$90 per person to more than 20 million Medicare enrollees** to offset Part B premiums, drawn from the **[[Medicare Improvement Fund]]** — a $2 billion account Congress created in 2008 and that no administration had ever spent from. The White House fact sheet confirms the $90 figure and the 20-million count; Trump's own announcement described the checks as "nearly $100." A Republican congressional aide told Dan Diamond of the *Washington Post* that lawmakers had been planning to use the fund to help pay for several health programs in 2026 and were taken aback by the announcement — the balance had been counted on as an offset elsewhere in the health budget. Trump paired the announcement with a promise that a "$5,000 Trump Dividend" would go to every U.S. citizen "if, and when, the Republicans win the Midterm Elections." The payments were announced **thirty-two days before** the [[2026 Midterm Elections]]. Details and sourcing on [[Medicare Improvement Fund]].