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CMS: the Medicare and Medicaid agency
Medicare 1965; named CMS 2001· Institution or agency
Fact, law or dataA rule, statute, definition or measured number.
The agency inside Health and Human Services that runs Medicare, Medicaid, children's health coverage and the Affordable Care Act marketplaces.
See it on the Money & Finance map →How it works
Lyndon Johnson signed Medicare and Medicaid into law in July 1965, and Harry Truman received the first Medicare card. The agency was the Health Care Financing Administration from 1977 and became CMS in 2001. Medicare covers about 68 million people 65 and older or disabled, funded by a 2.9% payroll tax, premiums and general revenue. Medicaid, run jointly with the states, covers about 70 million low-income people. Federal spending on the two exceeds $1.5 trillion a year, more than a fifth of the budget.
Why it matters
Health care is the fastest-growing part of the federal budget, so CMS costs drive long-run deficit forecasts; its payment rules also shape hospital and medical-office real estate.
Facts, rules and data
The annual Medicare Trustees Report (the 2025 edition projected the hospital trust fund depleted in 2033); CMS enrollment data; CBO cost projections; HHS improper-payment reports.
Debates and risks
How deeply the 2025 budget law's Medicaid cuts and work requirements will bite is uncertain; CBO projected about 10 million more uninsured by 2034 from the law.
Connections (2)
▸Social Security Administration (SSA) handles Medicare enrollment for CMS: the Medicare and Medicaid agencyFact, law or data
The connection
Most people sign up for Medicare through Social Security, which handles enrollment and eligibility for Medicare hospital (Part A) and doctor (Part B) coverage. SSA deducts Part B premiums, $202.90 a month standard in 2026, from Social Security checks, and uses IRS income data to charge higher earners surcharges called IRMAA.
When and why
Nationwide since Medicare benefits began in 1966; people turning 65 who already collect Social Security are enrolled automatically.
How we know
The Social Security Act's Medicare provisions; SSA–CMS enrollment agreements; SSA notices of premium deductions and surcharge decisions.
Debates and risks
Whether moving more enrollment online would ease SSA's long phone and office waits, worsened by 2025 staff cuts, is debated.
▸CMS: the Medicare and Medicaid agency refers Medicare fraud to Fraud enforcers: DOJ, FBI and the FTCFact, law or data
The connection
CMS uses data analytics to flag suspicious billing, suspends payments, revokes providers and refers cases to the HHS inspector general, which investigates with the FBI. Justice Department strike forces prosecute, and the False Claims Act lets whistleblowers sue for a share of recovered money. Common schemes: billing for services never given, kickbacks and phantom equipment.
When and why
Nationwide; the Medicare Fraud Strike Force began in Miami in 2007. A June 2025 takedown charged 324 defendants over about $14.6 billion in alleged fraud, the largest ever.
How we know
DOJ and HHS inspector general announcements; CMS improper-payment reports; False Claims Act recoveries, which come mostly from health care.
Debates and risks
How much Medicare and Medicaid money is lost to fraud is unknown; improper-payment figures, tens of billions a year, mix fraud with paperwork errors.