SPENDING AREA · HEALTH & MEDICARE
Health · function 550
Medicare · function 570
FY2025 Health / Medicare net outlays, shown separately. October 2024–September 2025. Final, completed fiscal year actuals; later revisions possible.
Two separate federal budget functions, not two programs to combine into a healthcare estimate. Medicaid is within Health (550), alongside other health activities; Medicare is a separate category (570). Neither figure is a Medicaid-only total. Do not add Medicaid spending again to Health. These are federal net outlays, not combined federal-and-state costs or every healthcare activity across government. Evidence: [1].
Medicare provides coverage for eligible older people and qualifying people with disabilities or certain conditions. Medicaid provides coverage to eligible groups under federal and state rules. Coverage can pay for care, but enrollment does not establish that someone obtained timely treatment. The September 2025 Medicaid snapshot is one month, not a FY2025 average. Source-review limitation: the original snapshot could not be accessed for this review and remains unverified; no enrollment figure from it is displayed. Evidence: [2], [3], [7].
Across the ledger: veterans’ hospital and medical care is in Veterans Benefits and Services (700), separate from both Health and Medicare. Evidence: [13].
Congress established Medicare and Medicaid in law and sets eligibility, financing and benefit rules. The president proposes budgets and signs or vetoes legislation; a proposal alone does not authorize payment. CMS administers Medicare and oversees Medicaid. States administer Medicaid within federal requirements and set provider rates subject to those requirements. Much spending follows existing eligibility law rather than a new annual household allocation. Evidence: [2], [5], [6], [7].
Original Medicare: contracted Medicare Administrative Contractors process Part A and Part B provider claims. Medicare Advantage and prescription-drug plans: CMS payment systems calculate monthly payments to participating plans. The plan receiving money is distinct from a patient receiving coverage and care. Evidence: [6]–[8].
Medicaid: the federal government matches an eligible share of state spending. States pay providers through fee-for-service arrangements or pay managed-care plans, which arrange and pay for covered services. Patients receive coverage and services, rather than the entire provider or insurer payment as cash. Cost-sharing and access rules vary. No FY2025 provider or insurer ranking is established here. Evidence: [2], [5].
Medicare result · calendar 2024. CMS reports $2.5 billion in Shared Savings Program savings relative to benchmarks and $4.1 billion in performance payments to accountable care organizations. Among the CMS Web Interface reporting group, adequately controlled blood pressure rose from 77.80% in 2023 to 79.49% in 2024. These are program-specific benchmark and reported-quality results—not a randomized estimate of all Medicare effectiveness or a FY2025 outcome. Evidence: [9].
Medicaid access gap · FY2023. GAO found that children’s well-child screening rates had not returned to pre-pandemic levels. Its review of four states and selected plans examined efforts to improve access; it is not a national causal evaluation of those efforts. Evidence: [10].
Prior-authorization oversight · 2024 review. In five selected states and plans, GAO found insufficient review of whether denials were appropriate. This does not establish a national denial rate. As of August 2026, GAO still marked its recommendations open, with one partially addressed. Evidence: [11].
Alternative payment design: the Medicare Shared Savings Program links participating care organizations to quality and spending performance. Clinicians and participating organizations work on coordinated care; the reported calendar-2024 results above support further scrutiny, not a promise that every model saves money or improves health. Evidence: [9], [12].
Alternative access oversight: GAO recommends clearer CMS expectations for states to monitor appropriate prior-authorization decisions. Guidance and reporting changes are steps toward implementation; an open recommendation is not a demonstrated improvement in patient access. Evidence: [11].
Alternative state contracts: GAO documents quality-linked managed-care payments in selected states. Ohio and Washington officials described incentives as useful for encouraging performance; North Carolina results were not yet available. That is an implementation approach, not proof of a nationwide outcome. Evidence: [10].
Sources & reading notes
Research checked October 6, 2026. Each finding retains its own observation period. Recommendations and projected savings are distinct from actual outlays and demonstrated outcomes.
Evidence limits: the studies retain their own periods and populations. This page does not establish FY2025 patient-level outcomes, recipient rankings, or a causal effect of the two function totals. No patient testimony has been invented.