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The Policy Implications of Medicare’s New Measure of Financial Health

This report examines a new measure of Medicare’s financial health established by the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (MMA). The report, authored by Marilyn Moon, takes an in-depth look at the program’s new solvency test, which measures general revenues as a share of total Medicare spending and can trigger a “funding warning” that compels the President to propose and the Congress to consider a funding warning.