$1.1T: CMS Sets Record for Annual Spending by a Federal Agency

By Terence P. Jeffrey | November 4, 2013 | 5:24pm EST

Marilyn Tavenner, administrator of the Centers for Medicare and Medicaid Services, testifies before the House Ways and Means Committee on Oct. 29, 2013. (AP Photo)

(CNSNews.com) - The Centers for Medicare and Medicaid Services, which runs the federal government’s major health-care programs as well as the Obamacare insurance exchange, spent $1,113,178,000,000 in fiscal 2013, according to the Monthly Treasury Statement for September, which was released last week.

That sets a record for the most money ever spent by a federal agency or department in a single year.

It also means CMS spent more in inflation-adjusted dollars than the entire federal government spent in 1965, when President Lyndon Johnson signed the legislation creating the Medicaid and Medicare programs.

In 1965, the entire federal government spent $118,228,000,000 in 1965 dollars, according to the Office of Management and Budget. That converts to $878,824,380,000 in 2013 dollars, according to the Bureau of Labor Statistics inflation calculator.

In 2010, CMS became the first federal agency to spend more than a trillion dollars, when it spent $1,035,783,000,000. In 2011, CMS spent $1,095,406,000,000; in 2012, it spent $1,052,799,000,000; and, in 2013, it spent a record $1,113,178,000,000.

“CMS outlays more benefits than any other Federal agency,” says the fiscal 2014 budget justification that CMS has sent to the congressional appropriations committees.

“CMS remains the largest purchaser of health care in the United States,” it says. “Our programs combined currently pay almost one-third of the Nation’s health expenditures.”

“With the implementation of the Affordable Care Act provisions, CMS has the opportunity to provide affordable health care to millions of additional Americans,” says the budget justification.

In fiscal 2013, according to the Monthly Treasury Statement, the Department of Defense spent $607.801 billion, and total “national defense” spending by all federal agencies was $635.211 billion.

At $635.211 billion, federal spending on national defense in fiscal 2013 equaled only 57 percent of the money spent by CMS.

Major elements of CMS's spending in fiscal 2013 included $265.392 billion for Grants to States for Medicaid, $242.406 billion for Payments to Health Care Trust Funds, $269.113 billion in benefit payments from the Federal Hospital Insurance Fund, $245.763 in benefit payments from the Federal Supplementary Medical Insurance Trust Fund, and $61.606 billion in benefit payments for the Medicare Prescription Drug program.

The CMS's budget justification for fiscal 2014 explains the $242.406 billion in "Payments to Health Care Trust Funds." "The annual appropriation for the Payments to the Health Care Trust Funds account makes payments from the General Fund to the Hospital Insurance (HI) and the Supplementary Medical Insurance (SMI) Trust Funds to reimburse the Trust Funds for amounts, initially borne by the trust funds, to which they are entitled under law." The budget justification says CMS will need $255.2 billion for that purpose in fiscal 2014.

On Friday and Monday, CMS did not respond to multiple telephone and email inquiries about its fiscal 2013 spending.

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