generation is projected by 2030 to increase enrollment to more than 80 million. in addition, the fact that the number of workers per enrollee will decline from 3.7 to 2.4 and that overall health care costs in the nation are rising pose substantial financial challenges to the program. medicare spending is projected to increase from just over $740 billion in 2018 to just over $1.2 trillion by 2026, or from 3.7% of gdp to 4.7%. baby-boomers are projected to have longer life spans, which will add to the future medicare spending. the 2019 medicare trustees report estimates that spending as a percent of gdp will grow to 6% by 2043 (when the last of the baby boomers turns 80) and then flatten out to 6.5% of gdp by 2093. in response to these financial challenges, congress made substantial cuts to future payouts to providers (primarily acute care hospitals and skilled nursing facilities) as part of ppaca in 2010 and the medicare access and chip reauthorization act of 2015 (macra) and policymakers have offered many additional competing proposals to reduce medicare costs further. in 2013 the urban institute published a report which analyzed the amounts that various households (single male, single female, married single-earner, married dual-earner, low income, average income, high income) contributed to the medicare program over their lifetimes, and how much someone living to the statistically expected age would expect to receive in benefits. they found differing amounts for the different scenarios, but even the group with the "worst" return on their medicare taxes would have concluded their working years with $158,000 in medicare contributions and growth (assuming annual growth equal to inflation plus 2%) but would receive $385,000 in medicare benefits (both numbers are in 2013 inflation adjusted dollars). overall, the groups paid into the system 13 to 41 percent of what they were expected to receive. cost reduction is influenced by factors including reduction in inappropriate and unnecessary care by evaluating evidence-based practices as well as reducing the amount of unnecessary, duplicative, and inappropriate care. cost reduction may also be effected by reducing medical errors, investment in healthcare information technology, improving transparency of cost and quality data, increasing administrative efficiency, and by developing both clinical/non-clinical guidelines and quality standards. eligibility in general, all persons 65 years of age or older who have been legal residents of the united states for at least five years are eligible for medicare. people with disabilities under 65 may also be eligible if they receive social security disability insurance (ssdi) benefits. specific medical conditions may also help people become eligible to enroll in medicare. people qualify for medicare coverage, and medicare part a premiums are entirely waived, if the following circumstances apply: they are 65 years or older and us citizens or have been permanent legal residents for five continuous years, and they or their spouses (or qualifying ex-spouses) have paid medicare taxes for at least 10 years. or they are under 65, disabled, and have been receiving either social security ssdi benefits or railroad retirement board disability benefits; they must receive one of these benefits for at least 24 months from date of entitlement (eligibility for first disability payment) before becoming eligible to enroll in medicare. or they get continuing dialysis for end-stage renal disease or need a kidney transplant. those who are 65 and older who choose to enroll in part a medicare must pay a monthly premium to remain enrolled in medicare part a if they or their spouse have not paid the qualifying medicare payroll taxes. people with disabilities who receive ssdi are eligible for medicare while they continue to receive ssdi payments; they lose eligibility for medicare based on disability if they stop receiving ssdi. the coverage does not begin until 24 months after the ssdi start date. the 24-month exclusion means that people who become disabled must wait two years before receiving government medical insurance, unless they have one of the listed diseases. the 24-month period is measured from the date that an individual is determined to be eligible for ssdi payments, not necessarily when the first payment is actually received. many new ssdi recipients receive "back" disability pay, covering a period that usually begins six months from the start of disability and ending with the first monthly ssdi payment. some beneficiaries are dual-eligible. this means they qualify for both medicare and medicaid. in some states for those making below a certain income, medicaid will pay the beneficiaries' part b premium for them (most beneficiaries have worked long enough and have no part a premium), as well as some of their out-of-pocket medical and hospital expenses. benefits and parts medicare cardsa sample of the medicare card format used through 2018. the id number is the subscriber's social security number, followed by a suffix indicating the holder's relationship to the subscriber (generally "a" for self). there are separate lines for basic part a and part b's supplementary medical coverage, each with its own start date.a sample of the new medicare cards mailed out in 2018 and 2019 depending on state of residence on a social security database. the new id number is randomly generated and not tied to any personally identifying information. beneficiaries on medicare part c health plans are issued with a separate card and id number, in addition to their original medicare card. medicare has four parts: loosely speaking part a is hospital insurance. part b is medical services insurance. medicare part d covers many prescription drugs, though some are covered by part b. in general, the distinction is based on whether or not the drugs are self-administered but even this distinction is not total. public part c medicare health plans, the most popular of which are branded medicare advantage, are another way for original medicare (part a and b) beneficiaries to receive their part a, b and d benefits; simply, part c is capitated fee and original medicare is fee for service. all medicare benefits are subject to medical necessity. the original program included parts a and b. part-c-like plans have existed as demonstration projects in medicare since the early 1970s, but the part was formalized by 1997 legislation. part d was enacted by 2003 legislation and introduced on january 1, 2006. previously, coverage for self-administered prescription drugs (if desired) was obtained by private insurance or through a public part c plan (or by one of its predecessor demonstration plans before enactment). in april 2018, cms began mailing out new medicare cards with new id numbers to all beneficiaries. previous cards had id numbers containing beneficiaries' social security numbers; the new id numbers are randomly generated and not tied to any other personally identifying information. part a: hospital/hospice insurance part a covers inpatient hospital stays where the beneficiary has been formally admitted to the hospital, including semi-private room, food, and tests. as of january 1, 2020, medicare part a had an inpatient hospital deductible of $1408, coinsurance per day as $352 after 61 days' confinement within one "spell of illness", coinsurance for "lifetime reserve days" (essentially, days 91–150 of one or more stay of more than 60 days) of $704 per day. the structure of coinsurance in a skilled nursing facility (following a medically necessary hospital confinement of three nights in row or more) is different: zero for days 1–20; $167.50 per day for days 21–100. many medical services provided under part a (e.g., some surgery in an acute care hospital, some physical therapy in a skilled nursing facility) are covered under part b. these coverage amounts increase or decrease yearly on the first day of the year. the maximum length of stay that medicare part a covers in a hospital admitted inpatient stay or series of stays is typically 90 days. the first 60 days would be paid by medicare in full, except one copay (also and more commonly referred to as a "deductible") at the beginning of the 60 days of $1340 as of 2018. days 61–90 require a co-payment of $335 per day as of 2018. the beneficiary is also allocated "lifetime reserve days" that can be used after 90 days. these lifetime reserve days require a copayment of $670 per day as of 2018, and the beneficiary can only use a total of 60 of these days throughout their lifetime. a new pool of 90 hospital days, with new copays of $1340 in 2018 and $335 per day for days 61–90, starts only after the beneficiary has 60 days continuously with no payment from medicare for hospital or skilled nursing facility confinement. some "hospital services" are provided as inpatient services, which would be reimbursed under part a; or as outpatient services, which would be reimbursed, not under part a, but under part b instead. the "two-midnight rule" decides which is which. in august 2013, the centers for medicare and medicaid services announced a final rule concerning eligibility for hospital inpatient services effective october 1, 2013. under the new rule, if a physician admits a medicare beneficiary as an inpatient with an expectation that the patient will require hospital care that "crosses two midnights", medicare part a payment is "generally appropriate". however, if it is anticipated that the patient will require hospital care for less than two midnights, medicare part a payment is generally not appropriate; payment such as is approved will be paid under part b. the time a patient spends in the hospital before an inpatient admission is formally ordered is considered outpatient time. but, hospitals and physicians can take into consideration the pre-inpatient admission time when determining if a patient's care will reasonably be expected to cross two midnights to be covered under part a. in addition to deciding which trust fund is used to pay for these various outpatient versus inpatient charges, the number of days for which a person is formally considered an admitted patient affects eligibility for part a skilled nursing services. medicare penalizes hospitals for readmissions. after making initial payments for hospital stays, medicare will take back from the hospital these payments, plus a penalty of 4 to 18 times the initial payment, if an above-average number of patients from the hospital are readmitted within 30 days. these readmission penalties apply after some of the most common treatments: pneumonia, heart failure, heart attack, copd, knee replacement, hip replacement. a study of 18 states conducted by the agency for healthcare research and quality (ahrq) found that 1.8 million medicare patients aged 65 and older were readmitted within 30 days of an initial hospital stay in 2011; the conditions with the highest readmission rates were congestive heart failure, sepsis, pneumonia, and copd and bronchiectasis. the highest penalties on hospitals are charged after knee or hip replacements, $265,000 per excess readmission. the goals are to encourage better post-hospital care and more referrals to hospice and end-of-life care in lieu of treatment, while the effect is also to reduce coverage in hospitals that treat poor and frail patients. the total penalties for above-average readmissions in 2013 are $280 million, for 7,000 excess readmissions, or $40,000 for each readmission above the us average rate. part a fully covers brief stays for rehabilitation or convalescence in a skilled nursing facility and up to 100 days per medical necessity with a co-pay if certain criteria are met: a preceding hospital stay must be at least three days as an inpatient, three midnights, not counting the discharge date. the skilled nursing facility stay must be for something diagnosed during the hospital stay or for the main cause of hospital stay. if the patient is not receiving rehabilitation but has some other ailment that requires skilled nursing supervision (e.g., wound management) then the nursing home stay would be covered. the care being rendered by the nursing home must be skilled. medicare part a does not pay for stays that only provide custodial, non-skilled, or long-term care activities, including activities of daily living (adl) such as personal hygiene, cooking, cleaning, etc. the care must be medically necessary and progress against some set plan must be made on some schedule determined by a doctor. the first 20 days would be paid for in full by medicare with the remaining 80 days requiring a co-payment of $167.50 per day as of 2018. many insurance group retiree, medigap and part c insurance plans have a