Medicare Expansion (ME)

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The content of this web page is arranged under the following headings:
1. Medicare Expansion Overview
2. 2017 Calendar Year Estimated Medicare Expansion Tax Computation
3. Individual Federal Income Tax & Medicare Expansion Tax Comparisons by Size of Adjusted Gross Income
4. Estimated 2017 Medicare Expansion Tax Per Capita
5. U.S. Residents Per Individual Federal Income Tax Return
6. 2015 Health Insurance Coverage of the Total Population
7. Glossary

 

1. Medicare Expansion Overview

Medicare Expansion (ME) provides mandatory health insurance coverage for everyone in the United States with a valid Social Security Number, Internal Revenue Service Individual Taxpayer Identification Number, or Internal Revenue Service Adoption Taxpayer Identification Number. ME is paid for with a ME Tax that is imposed on everyone who is required to file a U.S. Individual Income Tax Return. The ME Tax is withheld or included in estimated tax payments the same as for the Individual Income Tax. The amount of the ME Tax is directly proportional to the amount of the Individual Income Tax that is paid. Taxpayers with higher incomes pay a greater portion of the total Individual Income Tax, and will likewise pay a greater portion of the total ME Tax. No one but the individual Federal Income Tax payer is responsible for paying the ME Tax.

The universal ME health insurance will cover the health expenditures now paid by the following entities:
private health insurance companies, 
Medicare, 
Medicaid, 
the Children's Health Insurance Program (CHIP), 
the Department of Defense, 
the Department of Veterans Affairs, 
worksite health care, 
philanthropic organizations, 
the Indian Health Services, 
state and local general assistance and subsidies, 
the Maternal/Child Health federal-state partnership programs, 
vocational rehabilitation, 
the Federal General and Medical Program, 
the Federal General and Medical NEC Program, 
Affordable Care Act High Risk Pools, 
the Substance Abuse and Mental Health Services Administration (SAMHSA), 
the State of New York temporary disability insurance, 
school health, and 
public health activity. 

Federal, state, and local Workers Compensation programs are not covered by ME and remain in place. Investments in research, structures, and equipment are also not included in ME.

ME patients can go to any doctor, other health care provider, hospital, or other facility that’s enrolled in ME and accepting ME patients. Almost all medical service providers are expected to participate in the ME program because of the payment and administration efficiencies that will derive from a single-payer system.

Pre-existing conditions will be covered by ME along with the essential health benefits included in the Affordable Care Act. ME will have no yearly and lifetime coverage limits. Among the health expenditures covered by ME are the following: 
hospital,
physician & clinical,
specialized Veterans Administration health benefits,
dental services,
chiropractors, 
optometrists, 
physical therapists, 
occupational therapists, 
speech therapists, 
podiatrists, 
private-duty nurses,
home health care,
nursing care facilities & continuing care retirement communities,
residential mental health & substance abuse facilities, 
prescription drugs, 
some ambulance services,
contact lenses, 
eyeglasses & other ophthalmic products,
surgical & orthopedic products, 
medical equipment rental,
oxygen,
hearing aids,
non-prescription drugs,
surgical & medical instruments,
surgical dressings, 
diagnostic products (such as needles and thermometers), 
public health activity, and
administration expenses.

The 2017 Federal Insurance Contributions Act (FICA) Tax is composed of two rates for both the employee and the employer - (1) the Social Security tax rate is 6.2% of gross compensation with a $127,200 wage base limit and (2) the Medicare tax rate is 1.45% of gross compensation with no wage base limit. ME eliminates the 1.45% FICA Tax for Medicare. 

ME will also eliminate the need for private health insurance and Medicare premium payments. In addition, ME will eliminate the need for out-of-pocket spending for deductibles, coinsurance (copayments), and health savings accounts.

ME will not pay for services that are not medically necessary (such as elective cosmetic surgery) or are not medically approved (such as experimental drugs not approved by the Federal Drug Administration). A few long-term care expenses, such as for a private nursing home room when not medically needed, will need to be paid out-of-pocket. Out-of-pocket expenses will also be incurred for services delivered by providers that do not accept ME payments. 

The single-payer ME administrator will be the existing Centers for Medicare & Medicaid Services (CMS), which is part of the U.S. Department of Health and Human Services that currently administers Medicare, Medicaid, and the Children's Health Insurance Program (CHIP). CMS will continue to contract with private insurance companies to operate as intermediaries between the government and medical providers to administer claims and payment processing, call center services, clinician enrollment, and fraud investigation. CMS will also coordinate ME services delivery with the following existing entities:
U.S. Department of Veterans Affairs for specialized Veterans Administration health benefits,
TRICARE for Department of Defense civilians and uniformed personnel,
Indian Health Services for American Indians and Alaska Natives,
Maternal/Child Health federal-state partnership programs,
Substance Abuse and Mental Health Services Administration (SAMHSA),
school health services, and
public health activities.

ME is a pay-as-you-go program that will not add to the federal deficit. Medicare and Medicaid viability and solvency concerns are eliminated.

The 2017 Individual Federal Income Tax is expected to total $1.541543376 trillion and be distributed by Size of Adjusted Gross Income as follows:
0.002% – $1 under $5,000
0.016% – $5,000 under $10,000
0.070% – $10,000 under $15,000
0.204% – $15,000 under $20,000
0.368% – $20,000 under $25,000
0.539% – $25,000 under $30,000
1.522% – $30,000 under $40,000
2.027% – $40,000 under $50,000
6.271% – $50,000 under $75,000
7.240% – $75,000 under $100,000
21.646% – $100,000 under $200,000
20.607% – $200,000 under $500,000
10.841% – $500,000 under $1,000,000
4.571% – $1,000,000 under $1,500,000
2.855% – $1,500,000 under $2,000,000
7.174% – $2,000,000 under $5,000,000
3.963% – $5,000,000 under $10,000,000
10.071% – $10,000,000 or more
0.013% – No adjusted gross income

IF the Medicare Expansion universal health insurance program was in place today, the 2017 ME Tax is expected to total $3.229100196 trillion and will be distributed by Size of Adjusted Gross Income the same as the estimated 2017 Individual Federal Income Tax above. The amount of the ME Tax is directly proportional to the amount of the Individual Income Tax that is paid. Taxpayers with higher incomes pay a greater portion of the total Individual Income Tax, and will likewise pay a greater portion of the total ME Tax. No one but the individual Federal Income Tax payer is responsible for paying the ME Tax.

The 2017 estimated average monthly ME Tax per Individual Federal Income Tax return comparisons by Size of Adjusted Gross Income are as follows:
$66 monthly average per tax return – $1 under $5,000 adjusted gross income
$35 monthly average per tax return – $5,000 under $10,000 adjusted gross income
$46 monthly average per tax return – $10,000 under $15,000 adjusted gross income
$113 monthly average per tax return – $15,000 under $20,000 adjusted gross income
$191 monthly average per tax return – $20,000 under $25,000 adjusted gross income
$280 monthly average per tax return – $25,000 under $30,000 adjusted gross income
$409 monthly average per tax return – $30,000 under $40,000 adjusted gross income
$568 monthly average per tax return – $40,000 under $50,000 adjusted gross income
$920 monthly average per tax return – $50,000 under $75,000 adjusted gross income
$1,459 monthly average per tax return – $75,000 under $100,000 adjusted gross income
$2,960 monthly average per tax return – $100,000 under $200,000 adjusted gross income
$9,634 monthly average per tax return – $200,000 under $500,000 adjusted gross income
$30,571 monthly average per tax return – $500,000 under $1,000,000 adjusted gross income
$60,546 monthly average per tax return – $1,000,000 under $1,500,000 adjusted gross income
$88,801 monthly average per tax return – $1,500,000 under $2,000,000 adjusted gross income
$157,545 monthly average per tax return – $2,000,000 under $5,000,000 adjusted gross income
$358,118 monthly average per tax return – $5,000,000 under $10,000,000 adjusted gross income
$1,438,812 monthly average per tax return – $10,000,000 or more adjusted gross income
$5,017 monthly average per tax return – No adjusted gross income adjusted gross income

Assuming their 2016 and 2017 incomes are about the same, taxpayers can estimate their 2017 annual ME Tax liability by multiplying the amount on Line 56 of their 2016 Individual Federal Income Tax Return Form 1040 by the 2017 ME Tax Multiplier of 2.094719.

It should be noted that many Individual Federal Income Tax returns are joint returns and/or include multiple dependents – there is an estimated average of 2.14 U.S. residents per 2014 Individual Federal Income Tax return. The estimated 2017 annual ME Tax per U.S. resident is $9,886 ($824 per month).

 

2. 2017 Calendar Year Estimated Medicare Expansion Tax Computation

Listed next are the Medicare Expansion (ME) Tax computation steps that would have been followed if the ME Tax had first been implemented for the 2017 Calendar Year. Assuming their 2016 and 2017 incomes are about the same, taxpayers can estimate their 2017 ME Tax liability by multiplying the amount on Line 56 of their 2016 Tax Return Form 1040 by the 2017 ME Tax Multiplier of 2.094719.

Step #1. Determine the total actual ME Tax for the 2nd prior Calendar Year (2015).

Source Document: National Health Expenditures by type of service and source of funds, CY 1960-2015 [ZIP, 104KB] at https://www.cms.gov/research-statistics-data-and-systems/statistics-trends-and-reports/nationalhealthexpenddata/nationalhealthaccountshistorical.html.

ACTUAL MEDICARE EXPANSION TAX

BY SOURCE OF FUNDS

CALENDAR YEAR 2015

Expenditure Amount (Millions of Dollars)

Out of Pocket

338,150

338,150

Health Insurance

2,384,526

   Private Health Insurance

1,072,057

   Medicare

646,243

   Medicaid (Title XIX)

545,132

      Federal

344,033

      State and Local

201,099

   CHIP (Title XIX and Title XXI)

14,620

      Federal

10,913

      State and Local

3,707

   Department of Defense

41,786

   Department of Veterans Affairs

64,688

Other Third Party Payers and Programs

197,809

   Worksite Health Care

6,066

   Other Private Revenues

124,259

   Indian Health Services

3,770

   General Assistance

6,834

   Maternal/Child Health

3,704

      Federal

570

      State and Local

3,134

   Vocational Rehabilitation

534

      Federal

412

      State and Local

122

   Other Federal Programs*

12,263

   SAMHSA

3,473

   Other State and Local Programs**

32,294

   School Health

4,612

Public Health Activity

80,926

   Federal Funds

11,289

   State and Local Funds

69,637

GRAND TOTAL MEDICARE EXPANSION TAX

3,001,411

3,001,411

Workers' Compensation

49,416

49,416

Investment

154,733

   Research

46,714

      Private

5,301

      Federal Gov't

34,694

      State and Local Gov't

6,719

   Structures

48,950

      Private

41,720

      Federal Gov't

2,142

      State and Local Gov't

5,088

   Equipment

59,069

      Private

43,808

      Federal Gov't

5,363

      State and Local Gov't

9,898

GRAND TOTAL NATIONAL HEALTH EXPENDITURES BY SOURCE

3,205,560

3,205,560

* Other Federal Programs include OEO, Federal General and Medical, Federal General and Medical NEC,

   and High Risk Pools under ACA.

** Other State and Local Programs include State and Local Subsidies and TDI

SOURCE: Centers for Medicare & Medicaid Services, Office of the Actuary, National Health Statistics Group.

Step #2. Determine the total actual ME Tax for the 12th prior Calendar Year (2005).

Source Document: National Health Expenditures by type of service and source of funds, CY 1960-2015 [ZIP, 104KB] at https://www.cms.gov/research-statistics-data-and-systems/statistics-trends-and-reports/nationalhealthexpenddata/nationalhealthaccountshistorical.html.

ACTUAL MEDICARE EXPANSION TAX

BY SOURCE OF FUNDS

CALENDAR YEAR 2005

Expenditure Amount (Millions of Dollars)

Out of Pocket

263,806

263,806

Health Insurance

1,414,601

   Private Health Insurance

701,724

   Medicare

339,762

   Medicaid (Title XIX)

309,248

      Federal

177,463

      State and Local

131,785

   CHIP (Title XIX and Title XXI)

7,567

      Federal

5,254

      State and Local

2,313

   Department of Defense

26,498

   Department of Veterans Affairs

29,802

Other Third Party Payers and Programs

127,402

   Worksite Health Care

4,282

   Other Private Revenues

70,715

   Indian Health Services

2,439

   General Assistance

6,195

   Maternal/Child Health

3,437

      Federal

622

      State and Local

2,815

   Vocational Rehabilitation

461

      Federal

355

      State and Local

106

   Other Federal Programs*

6,363

   SAMHSA

3,219

   Other State and Local Programs**

26,928

   School Health

3,363

Public Health Activity

57,161

   Federal Funds

9,078

   State and Local Funds

48,083

GRAND TOTAL MEDICARE EXPANSION TAX

1,862,970

1,862,970

Workers' Compensation

41,533

41,533

Investment

119,724

   Research

40,318

      Private

3,300

      Federal Gov't

32,425

      State and Local Gov't

4,593

   Structures

36,136

      Private

30,465

      Federal Gov't

681

      State and Local Gov't

4,990

   Equipment

43,270

      Private

32,719

      Federal Gov't

3,775

      State and Local Gov't

6,776

GRAND TOTAL NATIONAL HEALTH EXPENDITURES BY SOURCE

2,024,227

2,024,227

* Other Federal Programs include OEO, Federal General and Medical, Federal General and Medical NEC,

   and High Risk Pools under ACA.

** Other State and Local Programs include State and Local Subsidies and TDI

SOURCE: Centers for Medicare & Medicaid Services, Office of the Actuary, National Health Statistics Group.

Step #3. Determine the average annual total ME Tax increase between the 12th prior Calendar Year (2005) and the 2nd prior Calendar Year (2015).

(Step #1 GRAND TOTAL MEDICARE EXPANSION TAX) - (Step #2 GRAND TOTAL MEDICARE EXPANSION TAX) / (10 Calendar Years)
= ($3.001411 trillion) - ($1.862970 trillion) / (10 Calendar Years)
= ($1.138441 trillion) / (10 Calendar Years)
= $113,844 billion per Calendar Year

Step #4. Determine how much more or less the actual total ME tax for the 2nd prior Calendar Year (2015) is than the previously estimated total ME Tax for the 2nd prior Calendar Year (2015).

As a result of timing necessities related to the ME Tax startup, it is assumed that the actual and estimated total ME Tax for both the 2015 and 2016 Calendar Years are the same. The first estimated total ME Tax is computed for Calendar Year 2017.

Step #5. Determine the estimated total ME Tax for the 1st prior Calendar Year (2016).

The estimated total ME Tax for the 2016 Calendar Year is the sum of the actual total ME Tax for the 2015 Calendar Year (determined in Step #1) and the average annual total ME Tax increase (determined in Step #3):
($3.001411 trillion) + ($0.113844 trillion)
= $3.115255 trillion

NOTE: Effective the 2018 Calendar Year, the estimated ME Tax for the 1st prior Calendar Year will have been previously determined using all the steps in this computation.

Step #6. Determine the estimated total ME Tax for the target Calendar Year (2017).

NOTE: After the ME Tax has been implemented, the estimated total ME Tax for the target Calendar Year will be determined  a few months prior to January 1 of the target Calendar Year.

(Step #5 estimated total ME Tax for the 2016 Calendar Year) + (Step #4 total ME Tax differential for the 2015 Calendar Year) + (Step #3 average annual total ME Tax increase)
= $3.115255 trillion + $0 + $0.113844 trillion
=
$3.229099 trillion

Step #7. Determine the actual Total Individual Federal Income Tax Amount and actual Number of Returns by Size of Adjusted Gross Income for the 3rd prior Calendar Year (2014).

NOTE: The actual Total Individual Federal Income Tax is on Line 56 of Tax Return Form 1040 for the 2016 Tax Year.

Source Document: "All Returns: Tax Liability, Tax Credits, and Tax Payments" for Tax Year 2014 at https://www.irs.gov/uac/soi-tax-stats-individual-statistical-tables-by-size-of-adjusted-gross-income.

Actual Tax Year 2014 Total Individual Federal Income Tax

By Size of Adjusted Gross Income

(thousands of dollars)

Size of adjusted gross income

Number of Returns

Amount ($1,000)

All returns, total

96,544,079

1,377,797,136

   No adjusted gross income

6,460

175,272

   $1 under $5,000

241,236

38,163

   $5,000 under $10,000

1,845,010

355,490

   $10,000 under $15,000

4,436,438

1,399,526

   $15,000 under $20,000

5,148,628

3,619,158

   $20,000 under $25,000

5,363,260

6,183,917

   $25,000 under $30,000

5,337,737

8,853,958

   $30,000 under $40,000

10,305,333

24,559,783

   $40,000 under $50,000

9,568,328

31,863,661

   $50,000 under $75,000

18,112,069

95,807,946

   $75,000 under $100,000

12,586,658

105,597,836

   $100,000 under $200,000

17,380,014

297,111,878

   $200,000 under $500,000

4,969,144

276,486,684

   $500,000 under $1,000,000

833,910

145,017,518

   $1,000,000 under $1,500,000

180,246

61,373,634

   $1,500,000 under $2,000,000

76,959

38,344,228

   $2,000,000 under $5,000,000

109,370

96,135,699

   $5,000,000 under $10,000,000

26,559

52,936,838

   $10,000,000 or more

16,721

131,935,947

NOTE: Detail may not add to totals because of rounding.

Source: IRS, Statistics of Income Division, Publication 1304, August 2016

Step #8. Determine the actual Total Individual Federal Income Tax Amount and actual Number of Returns by Size of Adjusted Gross Income for the 13th prior Calendar Year (2004).

NOTE: The actual Total Individual Federal Income Tax is on Line 56 of Tax Return Form 1040 for the 2016 Tax Year.

Source Document: "All Returns: Tax Liability, Tax Credits, and Tax Payments" for Tax Year 2004 at https://www.irs.gov/uac/soi-tax-stats-individual-statistical-tables-by-size-of-adjusted-gross-income.

Tax Year 2004 Total Individual Federal Income Tax

By Size of Adjusted Gross Income

(thousands of dollars)

Size of adjusted gross income

Number of Returns

Amount ($1,000)

All returns, total

89,101,934

831,976,333

   No adjusted gross income

4,556

86,064

   $1 under $5,000

753,517

55,075

   $5,000 under $10,000

3,883,897

713,105

   $10,000 under $15,000

5,672,789

2,491,501

   $15,000 under $20,000

6,143,870

5,218,299

   $20,000 under $25,000

5,932,734

7,894,860

   $25,000 under $30,000

5,850,586

10,675,322

   $30,000 under $40,000

11,283,839

28,213,041

   $40,000 under $50,000

9,467,339

33,915,521

   $50,000 under $75,000

17,350,625

92,955,349

   $75,000 under $100,000

10,021,150

85,557,202

   $100,000 under $200,000

9,718,430

175,205,533

   $200,000 under $500,000

2,345,868

139,227,163

   $500,000 under $1,000,000

432,783

71,339,306

   $1,000,000 under $1,500,000

103,887

31,072,424

   $1,500,000 under $2,000,000

45,065

19,435,625

   $2,000,000 under $5,000,000

65,501

47,962,105

   $5,000,000 under $10,000,000

15,827

25,756,272

   $10,000,000 or more

9,671

54,202,568

NOTE: Detail may not add to totals because of rounding.

Source: IRS, Statistics of Income Division, Publication 1304, August 2016


Step #9. Determine the average annual increases and decreases in the Number of Individual Federal Income Tax Returns by size of Adjusted Gross Income between the 13th prior Calendar Year (2004) and the 3rd prior Calendar Year (2014).

Source Documents: "All Returns: Tax Liability, Tax Credits, and Tax Payments" for Tax Year 2004 and Tax Year 2014 at https://www.irs.gov/uac/soi-tax-stats-individual-statistical-tables-by-size-of-adjusted-gross-income.

Individual Federal Income Tax Returns

By Size of Adjusted Gross Income

Tax Years 2004 and 2014

Source: IRS, Statistics of Income Division, Publication 1304, August 2016

NOTE: Detail may not add to totals because of rounding.

Increase

Average Annual

Size of adjusted gross income

2004 No. of Returns

2014 No. of Returns

(Decrease)

Increase/(Decrease)

All returns, total

89,101,934

96,544,079

7,442,145

744,215

   No adjusted gross income

4,556

6,460

1,904

190

   $1 under $5,000

753,517

241,263

(512,254)

(51,225)

   $5,000 under $10,000

3,883,897

1,845,010

(2,038,887)

(203,889)

   $10,000 under $15,000

5,672,789

4,436,438

(1,236,351)

(123,635)

   $15,000 under $20,000

6,143,870

5,148,628

(995,242)

(99,524)

   $20,000 under $25,000

5,932,734

5,363,260

(569,474)

(56,947)

   $25,000 under $30,000

5,850,586

5,337,737

(512,849)

(51,285)

   $30,000 under $40,000

11,283,839

10,305,333

(978,506)

(97,851)

   $40,000 under $50,000

9,467,339

9,568,328

100,989

10,099

   $50,000 under $75,000

17,350,625

18,112,069

761,444

76,144

   $75,000 under $100,000

10,021,150

12,586,658

2,565,508

256,551

   $100,000 under $200,000

9,718,430

17,380,014

7,661,584

766,158

   $200,000 under $500,000

2,345,868

4,969,144

2,623,276

262,328

   $500,000 under $1,000,000

432,783

833,910

401,127

40,113

   $1,000,000 under $1,500,000

103,887

180,246

76,359

7,636

   $1,500,000 under $2,000,000

45,065

76,959

31,894

3,189

   $2,000,000 under $5,000,000

65,501

109,370

43,869

4,387

   $5,000,000 under $10,000,000

15,827

26,559

10,732

1,073

   $10,000,000 or more

9,671

16,721

7,050

705

Step #10. Determine the average annual increases and decreases in the Individual Federal Income Tax Amount by size of Adjusted Gross Income between the 13th prior Calendar Year (2004) and the 3rd prior Calendar Year (2014).

Source Documents: "All Returns: Tax Liability, Tax Credits, and Tax Payments" for Tax Year 2004 and Tax Year 2014 at https://www.irs.gov/uac/soi-tax-stats-individual-statistical-tables-by-size-of-adjusted-gross-income.

Individual Federal Income Tax Amounts

By Size of Adjusted Gross Income

Tax Years 2004 and 2014

(thousands of dollars)

Source: IRS, Statistics of Income Division, Publication 1304, August 2016

NOTE: Detail may not add to totals because of rounding.

Amount

Average Annual

Increase

Increase

(Decrease)

(Decrease)

Size of adjusted gross income

2004 Amount ($1,000)

2014 Amount ($1,000)

($1,000)

($1,000)

All returns, total

$831,976,333

$1,377,797,136

$545,820,803

$54,582,080

   No adjusted gross income

$86,064

$175,272

$89,208

$8,921

   $1 under $5,000

$55,075

$38,163

($16,912)

($1,691)

   $5,000 under $10,000

$713,105

$355,490

($357,615)

($35,762)

   $10,000 under $15,000

$2,491,501

$1,399,526

($1,091,975)

($109,198)

   $15,000 under $20,000

$5,218,299

$3,619,158

($1,599,141)

($159,914)

   $20,000 under $25,000

$7,894,860

$6,183,917

($1,710,943)

($171,094)

   $25,000 under $30,000

$10,675,322

$8,853,958

($1,821,364)

($182,136)

   $30,000 under $40,000

$28,213,041

$24,559,783

($3,653,258)

($365,326)

   $40,000 under $50,000

$33,915,521

$31,863,661

($2,051,860)

($205,186)

   $50,000 under $75,000

$92,955,349

$95,807,946

$2,852,597

$285,260

   $75,000 under $100,000

$85,557,202

$105,597,836

$20,040,634

$2,004,063

   $100,000 under $200,000

$175,205,533

$297,111,878

$121,906,345

$12,190,635

   $200,000 under $500,000

$139,227,163

$276,486,684

$137,259,521

$13,725,952

   $500,000 under $1,000,000

$71,339,306

$145,017,518

$73,678,212

$7,367,821

   $1,000,000 under $1,500,000

$31,072,424

$61,373,634

$30,301,210

$3,030,121

   $1,500,000 under $2,000,000

$19,435,625

$38,344,228

$18,908,603

$1,890,860

   $2,000,000 under $5,000,000

$47,962,105

$96,135,699

$48,173,594

$4,817,359

   $5,000,000 under $10,000,000

$25,756,272

$52,936,838

$27,180,566

$2,718,057

   $10,000,000 or more

$54,202,568

$131,935,947

$77,733,379

$7,773,338

Step #11. Determine the estimated Total Individual Federal Income Tax Amount and estimated Number of Returns by Size of Adjusted Gross Income for the 2nd prior Calendar Year (2015).

NOTES: 
A. Estimated Total Individual Federal Income Tax Amount = (Step #7 table data) + (Step #10 average annual increases and decreases)
B. Estimated Number of Returns = (Step #7 table data) + (Step #9 average annual increases and decreases)

Estimated Tax Year 2015 Total Individual Federal Income Tax

By Size of Adjusted Gross Income

(thousands of dollars)

Size of adjusted gross income

Number of Returns

Amount ($1,000)

All returns, total

97,288,294

1,432,379,216

   No adjusted gross income

6,650

184,193

   $1 under $5,000

190,011

36,472

   $5,000 under $10,000

1,641,121

319,728

   $10,000 under $15,000

4,312,803

1,290,328

   $15,000 under $20,000

5,049,104

3,459,244

   $20,000 under $25,000

5,306,313

6,012,823

   $25,000 under $30,000

5,286,452

8,671,822

   $30,000 under $40,000

10,207,482

24,194,457

   $40,000 under $50,000

9,578,427

31,658,475

   $50,000 under $75,000

18,188,213

96,093,206

   $75,000 under $100,000

12,843,209

107,601,899

   $100,000 under $200,000

18,146,172

309,302,513

   $200,000 under $500,000

5,231,472

290,212,636

   $500,000 under $1,000,000

874,023

152,385,339

   $1,000,000 under $1,500,000

187,882

64,403,755

   $1,500,000 under $2,000,000

80,148

40,235,088

   $2,000,000 under $5,000,000

113,757

100,953,058

   $5,000,000 under $10,000,000

27,632

55,654,895

   $10,000,000 or more

17,426

139,709,285

NOTE: Detail may not add to totals because of rounding.

Source: IRS, Statistics of Income Division, Publication 1304, August 2016

Step #12. Determine the estimated Total Individual Federal Income Tax Amount and estimated Number of Returns by Size of Adjusted Gross Income for the 1st prior Calendar Year (2016).

NOTES: 
A. Estimated Total Individual Federal Income Tax Amount = (Step #11 table data) + (Step #10 average annual increases and decreases)
B. Estimated Number of Returns = (Step #11 table data) + (Step #9 average annual increases and decreases)

Estimated Tax Year 2016 Total Individual Federal Income Tax

By Size of Adjusted Gross Income

(thousands of dollars)

Size of adjusted gross income

Number of Returns

Amount ($1,000)

All returns, total

98,032,509

1,486,961,296

   No adjusted gross income

6,840

193,114

   $1 under $5,000

138,786

34,781

   $5,000 under $10,000

1,437,232

283,966

   $10,000 under $15,000

4,189,168

1,181,130

   $15,000 under $20,000

4,949,580

3,299,330

   $20,000 under $25,000

5,249,366

5,841,729

   $25,000 under $30,000

5,235,167

8,489,686

   $30,000 under $40,000

10,109,631

23,829,131

   $40,000 under $50,000

9,588,526

31,453,289

   $50,000 under $75,000

18,264,357

96,378,466

   $75,000 under $100,000

13,099,760

109,605,962

   $100,000 under $200,000

18,912,330

321,493,148

   $200,000 under $500,000

5,493,800

303,938,588

   $500,000 under $1,000,000

914,136

159,753,160

   $1,000,000 under $1,500,000

195,518

67,433,876

   $1,500,000 under $2,000,000

83,337

42,125,948

   $2,000,000 under $5,000,000

118,144

105,770,417

   $5,000,000 under $10,000,000

28,705

58,372,952

   $10,000,000 or more

18,131

147,482,623

NOTE: Detail may not add to totals because of rounding.

Source: IRS, Statistics of Income Division, Publication 1304, August 2016

Step #13. Determine the estimated Total Individual Federal Income Tax Amount and estimated Number of Returns by Size of Adjusted Gross Income for the target Calendar Year (2017).

NOTES: 
A. Estimated Total Individual Federal Income Tax Amount = (Step #12 table data) + (Step #10 average annual increases and decreases)
B. Estimated Number of Returns = (Step #12 table data) + (Step #9 average annual increases and decreases)

Estimated Tax Year 2017 Total Individual Federal Income Tax

By Size of Adjusted Gross Income

(thousands of dollars)

Size of adjusted gross income

Number of Returns

Amount ($1,000)

All returns, total

98,776,724

1,541,543,376

   No adjusted gross income

7,030

202,035

   $1 under $5,000

87,561

33,090

   $5,000 under $10,000

1,233,343

248,204

   $10,000 under $15,000

4,065,533

1,071,932

   $15,000 under $20,000

4,850,056

3,139,416

   $20,000 under $25,000

5,192,419

5,670,635

   $25,000 under $30,000

5,183,882

8,307,550

   $30,000 under $40,000

10,011,780

23,463,805

   $40,000 under $50,000

9,598,625

31,248,103

   $50,000 under $75,000

18,340,501

96,663,726

   $75,000 under $100,000

13,356,311

111,610,025

   $100,000 under $200,000

19,678,488

333,683,783

   $200,000 under $500,000

5,756,128

317,664,540

   $500,000 under $1,000,000

954,249

167,120,981

   $1,000,000 under $1,500,000

203,154

70,463,997

   $1,500,000 under $2,000,000

86,526

44,016,808

   $2,000,000 under $5,000,000

122,531

110,587,776

   $5,000,000 under $10,000,000

29,778

61,091,009

   $10,000,000 or more

18,836

155,255,961

NOTE: Detail may not add to totals because of rounding.

Source: IRS, Statistics of Income Division, Publication 1304, August 2016

Step #14. Determine the ME Tax Multiplier.

ME Tax Multiplier = (Step #6 estimated total ME Tax for the 2017 Calendar Year) / (Step #13 estimated total Individual Federal Income Tax for the 2017 Calendar Year)
= $3.229099 trillion / $
1.541543 trillion
=
2.094719

Step #15. Determine the estimated ME Tax for the target Calendar Year (2017).

NOTE: The ME Tax Amount is the Income Tax Returns Amount in Step #13 multiplied by the 2.094719 ME Tax Multiplier in Step #14.

Calendar Year 2017 Estimated Medicare Expansion Tax

By Size of Adjusted Gross Income

Source: IRS, Statistics of Income Division, Publication 1304, August 2016

NOTE: Detail may not add to totals because of rounding.

Average

Annual ME Tax

Per Return

Number of

Income Tax Returns

Income Tax Returns

Amount ($1,000)

ME Tax

Amount ($1,000)

Size of adjusted gross income

No adjusted gross income

7,030

$202,035

$423,207

$60,200

$1 under $5,000

87,561

$33,090

$69,314

$792

$5,000 under $10,000

1,233,343

$248,204

$519,918

$422

$10,000 under $15,000

4,065,533

$1,071,932

$2,245,396

$552

$15,000 under $20,000

4,850,056

$3,139,416

$6,576,194

$1,356

$20,000 under $25,000

5,192,419

$5,670,635

$11,878,386

$2,288

$25,000 under $30,000

5,183,882

$8,307,550

$17,401,982

$3,357

$30,000 under $40,000

10,011,780

$23,463,805

$49,150,078

$4,909

$40,000 under $50,000

9,598,625

$31,248,103

$65,455,995

$6,819

$50,000 under $75,000

18,340,501

$96,663,726

$202,483,343

$11,040

$75,000 under $100,000

13,356,311

$111,610,025

$233,791,640

$17,504

$100,000 under $200,000

19,678,488

$333,683,783

$698,973,760

$35,520

$200,000 under $500,000

5,756,128

$317,664,540

$665,417,948

$115,602

$500,000 under $1,000,000

954,249

$167,120,981

$350,071,494

$366,855

$1,000,000 under $1,500,000

203,154

$70,463,997

$147,602,273

$726,554

$1,500,000 under $2,000,000

86,526

$44,016,808

$92,202,844

$1,065,609

$2,000,000 under $5,000,000

122,531

$110,587,776

$231,650,316

$1,890,544

$5,000,000 under $10,000,000

29,778

$61,091,009

$127,968,497

$4,297,417

$10,000,000 or more

18,836

$155,255,961

$325,217,611

$17,265,747

All returns, total

98,776,724

$1,541,543,376

$3,229,100,196

$32,691

 

3. Individual Federal Income Tax & Medicare Expansion Tax Comparisons by Size of Adjusted Gross Income

NOTES:
A. The Estimated Tax Year 2017 Total Individual Federal Income Tax by Size of Adjusted Gross Income is from Step #13 of the "2017 Calendar Year Estimated Medicare Expansion Tax Computation" above on this web page.
B. The Calendar Year 2017 Estimated Medicare Expansion Tax by Size of Adjusted Gross Income is from Step #15 of the "2017 Calendar Year Estimated Medicare Expansion Tax Computation" above on this web page.

Estimated Individual Federal Income Tax & Estimated Medicare Expansion Tax

Comparisons by Size of Adjusted Gross Income

Calendar Year 2017

NOTE: Detail may not add to totals because of rounding.

Source: IRS, Statistics of Income Division, Publication 1304, August 2016

 

Size of adjusted gross income

Individual Federal

Income Tax

Amount ($1,000)

Percent Total

Federal Income

Tax Amount

Medicare

Expansion Tax

Amount ($1,000)

Percent Total

Medicare Expansion

Tax Amount

No adjusted gross income

$202,035

0.013%

$423,207

0.013%

$1 under $5,000

$33,090

0.002%

$69,314

0.002%

$5,000 under $10,000

$248,204

0.016%

$519,918

0.016%

$10,000 under $15,000

$1,071,932

0.070%

$2,245,396

0.070%

$15,000 under $20,000

$3,139,416

0.204%

$6,576,194

0.204%

$20,000 under $25,000

$5,670,635

0.368%

$11,878,386

0.368%

$25,000 under $30,000

$8,307,550

0.539%

$17,401,982

0.539%

$30,000 under $40,000

$23,463,805

1.522%

$49,150,078

1.522%

$40,000 under $50,000

$31,248,103

2.027%

$65,455,995

2.027%

$50,000 under $75,000

$96,663,726

6.271%

$202,483,343

6.271%

$75,000 under $100,000

$111,610,025

7.240%

$233,791,640

7.240%

$100,000 under $200,000

$333,683,783

21.646%

$698,973,760

21.646%

$200,000 under $500,000

$317,664,540

20.607%

$665,417,948

20.607%

$500,000 under $1,000,000

$167,120,981

10.841%

$350,071,494

10.841%

$1,000,000 under $1,500,000

$70,463,997

4.571%

$147,602,273

4.571%

$1,500,000 under $2,000,000

$44,016,808

2.855%

$92,202,844

2.855%

$2,000,000 under $5,000,000

$110,587,776

7.174%

$231,650,316

7.174%

$5,000,000 under $10,000,000

$61,091,009

3.963%

$127,968,497

3.963%

$10,000,000 or more

$155,255,961

10.071%

$325,217,611

10.071%

TOTALS

$1,541,543,376

100.000%

$3,229,100,196

100.000%

 

4. Estimated 2017 Medicare Expansion Tax Per Capita

NOTES:
A. The estimated 2017 Medicare Expansion Tax is from Step #15 of the "2017 Calendar Year Estimated Medicare Expansion Tax Computation" above on this web page.
B. The estimated 2017 total U.S. resident population is from Table 1 of the United States Census Bureau web page at https://www.census.gov/population/projections/data/national/2014/summarytables.html.

Estimated 2017 Medicare Expansion Tax Per Capita = (Estimated 2017 Medicare Expansion Tax) / (Estimated 2017 Total U.S. Resident Population)
= ($3.229100196 trillion) / (326,626,000)
= $9,886

 

5. U.S. Residents Per Individual Federal Income Tax Return

NOTES:
A. B. The estimated 2014 United States population is from http://www.stats.indiana.edu/population/PopTotals/2016_stateest.asp 
B. The 2014 number of federal Individual Federal Income Tax Returns data is from the "All Returns: Tax Liability, Tax Credits, and Tax Payments" spreadsheet at https://www.irs.gov/uac/soi-tax-stats-individual-statistical-tables-by-size-of-adjusted-gross-income

Estimated 2014 U.S. Residents Per Individual Federal Income Tax Return = (Estimated 2014 Total U.S. Resident Population) / (2014 Total Number of Individual Federal Income Tax Returns)
= (318,563,456) / (148,606,578)
= 2.14

NOTE: The total number of 2014 federal individual income tax returns was 148,606,578. The number of nontaxable returns was 52,062,499. In other words, 35% of Americans did not pay federal income tax in 2014.

 

6. 2015 Health Insurance Coverage of the Total Population

Source Document: Health Insurance Coverage of the Total Population at http://kff.org/other/state-indicator/total-population/?currentTimeframe=0&sortModel=%7B%22colId%22:%22Location%22,%22sort%22:%22asc%22%7D.

The sources of health insurance coverage for the total Unites States population in 2015 is as follows:
Private Health Insurance = 65%
    49% Employer
      7% Non-Group
      9% Uninsured
Government Health Insurance = 36%
    20% Medicaid
    14% Medicare
      2% Other Public

Employer: Includes those covered by employer-sponsored coverage either through their own job or as a dependent in the same household.

Non-Group: Includes individuals and families that purchased or are covered as a dependent by non-group insurance.

Uninsured: Includes those without health insurance and those who have coverage under the Indian Health Service only.

Medicaid: Includes those covered by Medicaid, the Children’s Health Insurance Program (CHIP), and those who have both Medicaid and another type of coverage, such as dual eligibles who are also covered by Medicare.

Medicare: Includes those covered by Medicare, Medicare Advantage, and those who have Medicare and another type of non-Medicaid coverage where Medicare is the primary payer. Excludes those with Medicare Part A coverage only and those covered by Medicare and Medicaid (dual eligibles).

Other Public: Includes those covered under the military or Veterans Administration.

 

7. Glossary

Source Document: Definitions, Sources, and Methods [PDF, 1MB] at https://www.cms.gov/research-statistics-data-and-systems/statistics-trends-and-reports/nationalhealthexpenddata/nationalhealthaccountshistorical.html.

Administration and Total Net Cost of Health Insurance Expenditures include the administrative costs of health care programs such as Medicare and Medicaid as well as the net cost of Private Health Insurance. Net cost is the difference between private health insurance expenditures and benefits incurred and includes administrative costs, additions to reserves, rate credits and dividends, premium taxes and fees, and net underwriting gains or losses.

Children's Health Insurance Program (CHIP) is a joint federal/State program that provides health insurance for children in families that do not have health insurance coverage and are not eligible for Medicaid.

Department of Defense health care program - TRICARE - covers members of the uniformed services, their families and their survivors, as well as retired members and their families.

Durable Medical Equipment includes retail sales of items such as contact lenses, eyeglasses and other ophthalmic products, surgical and orthopedic products, medical equipment rental, oxygen and hearing aids. Durable medical equipment generally has a useful life of over three years.

Equipment is comprised of the value of new capital equipment (including software) purchased or put in place by the medical sector during the year. This measure of medical sector investment includes establishments engaged in providing health care, but does not include retail establishments that sell non-durable or durable medical goods. Non-structural equipment such as X-ray machines and beds are included in equipment.

General Assistance refers to direct payments or payments to vendors to or on behalf of needy persons who do not qualify for federally financed assistance programs. It is provided by state and local government jurisdictions, and is not financed in whole or part by federal funds. General assistance may be administered by the state welfare agency, a local agency, or a local agency under state supervision. Eligibility requirements and payment levels of general assistance programs vary greatly from state to state and often within a state.

Indian Health Services is an agency within the Department of Health and Human Services that is responsible for providing federal health services to American Indians and Alaska Natives. The provision of health services to members of federally-recognized tribes grew out of the special government-to-government relationship between the federal government and Indian tribes. Indian Health Services provides a comprehensive health service delivery system for approximately 1.9 million American Indians and Alaska Natives who belong to 566 federally recognized tribes in 35 states.

Investment includes spending for noncommercial biomedical research and expenditures by health care establishments on structures and equipment.

Maternal/Child Health is a Federal-State partnership program. States and jurisdictions design and implement a wide range of maternal and child health programs that meet national and state goals such as reducing infant mortality and the incidence of handicapping conditions among children, increasing the number of immunized children, increasing the number of children in low-income households who receive assessments and follow-up diagnostic and treatment services, providing access to comprehensive prenatal care for women; and facilitating the development of comprehensive, family-centered systems of care for children with special health care needs. The States are required by law to spend three dollars for every four federal dollars allocated.

Medicaid is a joint state and federal insurance program that is available only to certain low-income individuals and families who fit into an eligibility group that is recognized by federal and state law.

Medicare is a health insurance program for people age 65 or older, people under the age of 65 with certain disabilities, and people of all ages with end-stage renal disease.

Nursing care facilities & continuing care retirement communities are (a) freestanding private sector, local government, and state government establishments primarily engaged in providing inpatient nursing, rehabilitative, and continuous personal care services to persons requiring nursing care (including memory care); (b) continuing care retirement communities with on-site nursing care facilities; and (c) nursing facilities operated by the Department of Veterans Affairs (VA). Note: hospital-based nursing home care is categorized as hospital care.

Other Federal Programs include federal general hospital/medical expenditures, Office of Economic Opportunity , Non-XIX federal, and pre-existing conditions insurance plans. The Office of Economic Opportunity and Non-XIX Federal are both programs that no longer exist. Pre-existing conditions insurance plans were created under the Affordable Care Act to provide a health coverage option for U.S. citizens and legal residents that have been without health coverage for at least six months, have a pre-existing condition, or have been denied health coverage because of their health condition.

Other Non-durable Medical Products include non-prescription drugs (products purchased over the counter such as analgesics and cough and allergy medications) and medical sundries (items such as surgical and medical instruments and surgical dressings, and diagnostic products such as needles and thermometers). Non-durable products generally last less than three years.

Other Private Revenues are commonly provided through philanthropy. Philanthropic support may be direct from individuals or may be obtained through philanthropic fund-raising organizations such as the United Way, or other foundations or corporations. Philanthropic revenues may be spent directly for patient care or may be held in an endowment fund to produce income to cover current expenses. For institutions such as hospitals and nursing homes, other private funds also include income from the operation of gift shops, cafeterias, parking lots, educational programs, and investment income.

Other State and Local Programs include temporary disability insurance, state and local subsidies to providers, and Non-XIX state and local funding. In general, all spending by state and local governments that is not reimbursed by the federal government (through benefit payments or grants-in-aid) nor by patients or their agents is treated as state and local expenditures. Temporary disability insurance includes medical care benefits provided to workers as a result of temporary non-occupational disability or short-term sickness - this benefit is currently offered solely in the state of New York. State and local subsidies are payments by the state and local government to hospitals, home health agencies, and other facilities owned by the state. Non-XIX state and local funding is a program that no longer exists. As with federal expenditures, payment for employee health insurance by state and local governments is included under Private Health Insurance expenditures.

Out-of-Pocket spending for health care consists of direct spending by consumers for health care goods and services. Included is the amount paid out-of-pocket for services not covered by insurance and the amount of coinsurance or deductibles required by Private Health Insurance and public programs such as Medicare and Medicaid (not paid by some other third party), as well as payments covered by health savings accounts. Premium payments for insurance plans such as Private Health Insurance and Medicare are not included in out-of-pocket spending.

Private Health Insurance plans include fully-insured and self-insured health plans. Fully-insured plans are health insurance plans where the insurance company takes on all of the risk of insuring the plan’s beneficiaries. Self-insured plans are offered by employers and other groups who directly assume the major cost and risk of health insurance for their employees or members, with some self-insured employers or groups bearing the entire risk. Self-insured groups can also insure against large claims by purchasing stop-loss insurance plans. Stop-loss coverage is a form of reinsurance that limits the amount an employer will have to pay for each person’s health care (individual limit) or for the total expense of the company (group limit). In addition, some self-insured groups’ contract with traditional carriers or third-party administrators for claims processing and other administrative services while other self-insured plans are self-administered.

Public Health Activity is where the government, in addition to funding the care of individual citizens, is involved in organizing and delivering publicly provided health services such as epidemiological surveillance, inoculations, immunization/vaccination services, disease prevention programs, the operation of public health laboratories, and other such functions. The Food and Drug Administration and the Centers for Disease Control and Prevention account for the great majority of federal spending in this category. Substantial federal public health funding also comes from the Public Health and Social Services Emergency Fund and the Department of Homeland Security. State and local government public health activity expenditures are primarily for the operation of state and local health departments. Federal payments to state and local governments are deducted to avoid double counting.

School Health includes expenditures for students in primary and secondary public and private schools. This may include school nursing services, hearing and vision tests, as well as more comprehensive clinical services.

Structures are defined as the value of new construction put in place by the medical sector. This measure of the medical sector investment includes establishments engaged in providing health care, but does not include retail establishments that sell non-durable or durable medical goods. The construction measure includes new buildings; additions, alterations, and major replacements; mechanical and electric installations; and site preparation. The value of new construction put in place includes the cost of materials and labor, contractor profit, the cost of architectural and engineering work, those overhead and administrative costs chargeable to the project on the owner’s books, and interest and taxes paid during construction. Maintenance and repairs are excluded.

Substance Abuse and Mental Health Services Administration (SAMHSA) provides grants or outlays for program areas such as: Substance Abuse Treatment Capacity, Mental Health System Transformation, Strategic Prevention Framework, Co-Occurring Disorders, Seclusion & Restraint (elimination of), Older Adults, and HIV/AIDS & Hepatitis.

Vocational Rehabilitation program provides funds from the federal and state and local government for the rehabilitation of individuals with physical and mental impairments.

Workers' Compensation includes expenditures for medical benefits that are paid for by federal and state and local workers compensation programs. The U.S. Department of Labor, Office of Workers' Compensation Programs administers compensation programs which provide benefits to federal workers or their dependents that are injured at work or acquire an occupational disease. Non-federal workers’ compensation programs are financed almost exclusively by employers. All non-federal workers’ compensation programs are designed and administered by the state. Generally state laws require that all non-federal employers purchase insurance, either from commercial (private) insurers or from publicly operated state funds, or prove that they have the financial ability to carry their own risk.

Worksite Health Care represents expenditures directly provided by employers for their employees. This includes services such as those provided at an on-site health unit, such as the administration of flu shots and blood tests, or more extensive medical care such as onsite physician or hospital services.

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This page was last updated on 07/29/17.