Department of Health and Human Servces 
OFFICE OF 
INSPECTOR GENERAL 
INTERSTATE FLOW OF 
MEDICARE FUNDS 
.. SERV1(' 
." .2 
Richard P. Kusserow 
INSPECfOR GENERAL 
1t.,,,:W  OEI-12-89-89220  EXECUTIV 
MMAR 
SU" 
Introduction 
This inspection details on a state-by-state basis, how the Medicare program (1) obtains 
revenue "contributions" through various forms of taxation and insurance premiums 
and (2) makes "disbursements" to purchase health care servces. This inspection 
collects publicly available 1985 data on each state s contributions to the Medicare trust 
funds and concurrent disbursement for servces to Medicare beneficiaries
, calculates
the net flow of Medicare funds into or out of each state, and tests possible reasons for
this flow. 
Results 
On average, Part A and B withdrew 1.89 percent of gross state product in Medicare 
taxes and premiums, while returning 1.76 percent in provider and practitioner 
reimbursement. However, this ratio varied from state to state. For example
, Florida
and Pennsylvania each enjoyed an annual "
net grain" of over $1 bilion. Conversely,
New York and Texas each suffered a "net loss" of over $1 bilion. Overall, 16 states 
(or other jurisdictions) received $4.2 bilion more in Medicare disbursements than they
paid in revenues. Thirty-six states contributed $9.4 bilion more into Medicare 
revenues that they received in disbursements. The difference accumulated in the 
Medicare trust funds. 
When initiating this inspection, the Office of Inspector General hypothesized that 
Medicare s fied deductibles and co-payments would transfer money from states with 
low average incomes and health care costs to those with high average 
incomes and 
health care costs. Contrary to this expectation, multivariate analysis establishes that a 
state s contributions to Medicare correlate with its economic strength. 
Disbursements 
relate to the state s proportion of elderly residents, availability of health care 
resources, and general health status.  ........................................................................ ......   
. . . . . . . . . . . . . ..  ..  ..  ..  ..  ..  ...   .. . . . . . . . ... .   . .... .    . ....  .   .. ...  .   ... ...   .   ... .. .  . .  ..  ...  ...   ..  . . . .. . . .. ..   . .. . .  . . .. ...   .   . ... ... .  .   . ... .....  .  .     ... :.. ... . .. . .  . ..   .  . .. . .... .... ..   .  .     . ..  ...... ...   . ..      ..... . ....  . .   .  . ...... .. . .  ...........       .....     
. . . . . . ...   ...   ....    ....    .....     ......      .......       .......       ........        ........        ........        ........        ........        ........        ........        ........        ........        ........        ........        ........        ........        ........        ........        ........        ........        ........        ........        ........        ..........          .........       .  .. ....... .        . .........         . ....... .      .  ...... ..      .. .... ..   .   .  .... ...      .  .......  .     . .. .....  . .     ... . ....   .  .  . ...... .  ..   .    ...  ...  ...    . ....   ...     ... .  .....    . .   . ...  ... .   ...     ...  .......         .........      .. .......  .......       
ENTS 
CON1"' 
TABLE  OF 
EXECUTIVE SUMMARY 
CONTENTS........................................... 
TABLE OF 
INRODUCTION. . . 
Purpose. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
Medicare. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
Part A contributions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
Part B contributions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
Medicare administration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
Medicare finances 
Methodology 
Data sources

FINDINGS 
Interstate flow of Medicare funds. . . . . . . . . . . . . 
Univariate analysis of possible causes 
Beneficiaries 
Population. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
Employment

Gross State Product. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Multivariate analysis of possible 
causes. . . . . . . . . . . . . . . . . . . . . . . . . .. 
Part A contributions: Payroll tax 
Part A contributions: General revenue. . . . 
Part A disbursements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
Part B contributions: Beneficiary premiums 
Part B contributions: General revenue 
Part B disbursements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
Conclusion. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
REFERENCES 
Appendix 1: Old age, survivors, disabilty health insurance contributions by 
state, 1985 .. . . . . . . . . 
Appendix 2: General revenue contributions by state, 1985 . . . . . . . . . . 
Appendix 3: Part B premium contributions by state
, 1985 ............. 
Appendix 4: Total Part A contributions and disbursements by state, 1985 
Appendix 5: Total Part B contributions and disbursements by state, 1985  ...   ...   ...   ...   ...   ...   ...   ....    ....    ....    ....    ....    ....    ....
. . . ..  ..  ..  ..  ..  ..  ..  ..  ..  ..  ..  ..  ..  ..  ..  ..  ..  ..  ..  ..  ..  ..  ..  ..  ..  ..  ..  ..  ..  ..  ..  ..  . . . . . . .
Appendix 6: Net Part A and Part B contributions and disbursements by state 
1985 .................................................... 
Appendix 7: Ratio of Part A and Part B contributions to disbursements by 
state, 1985 .. . . . . 
Appendix 8: Part A and Part B contributions and disbursements per beneficiary 
by state
, 1985 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
Appendix 9: Part A and Part B contributions and disbursements per population 
by state
, 1985 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
Appendix 10: Part A and Part B contributions and disbursements per employee 
by state
, 1985 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
Appendix 11: Part A and Part B contributions and disbursements per gross
state product ($ milion) by state, 1985 . . . . . . . . . . . . . . . . . . . . . . . . . . . -
Appendix 12: Population, employees, and gross state product per beneficiary by 
state, 1985 .. . . . . . . . 
Appendix 13: Payroll tax and Part A general revenue contribution per 
beneficiary, population, employees, and gross state product by state 
1985 ....................................................

Appendix 14: Premiums and Part B general revenue contribution per 
beneficiary, population, employees, and gross state product by state 
1985 .................................................... 
VII  INTRODUCI' ION

Purose 
This inspection originated with the July 1, 1988 enactment of the Medicare 
Catastrophic Coverage Act of 1988, P.L. 100-360. Among other provisions, this 
legislation restricted the inpatient deductible to the first hospitalization of the year 
removed day limits on hospitalization, eliminated co-insurance on inpatient servces 
and limited Part B out-of-pocket expenses. It financed these servces with an income 
related premium on Medicare beneficiaries. 
The Office of Inspector General hypothesized that certain states have higher than 
average (1) resident incomes and (2) health care costs (e.  , due to higher local costs 
broader array of health services available, and higher intensity of servce). Other 
states, without major medical centers, have lower than average incomes and health 
care costs. If a health insurance program (like Medicare) has fixed dollar deductibles 
co-payments, and limits; residents of higher cost states would reach them more often 
and more quickly than residents of lower cost states. High cost states would therefore 
receive a greater proportion of the insurance program s benefits. 
At the same time, financing such a program with equal sized premiums from all 
beneficiaries exacts a disproportionate share of revenues from those beneficiaries with 
lower average incomes. A flat tax on payroll also regressively burdens residents of 
states with lower average incomes. Only the portion financed from general revenue 
(mainly the income tax) progressively spares these states. Medicare could therefore 
have the net effect of transferring funds from lower income states (which pay a larger 
share of the taxes and premiums) to higher income states (which generate large health 
care expenses). The Office of Inspector .General (OIG) originally initiated this 
inspection to test this hypothesis and to determine how the catastrophic coverage 
legislation s addition of a income based premium on the elderly would affect this flow 
of Medicare funds between states. Although P.L. 101-234, the Medicare Catastrophic 
Coverage Repeal Act of 1989, voided P.L. 100-360' s coverage on December 13, 1989
the OIG elected to complete its evaluation of the first question. 
This inspection makes no value judgment as to the desirabilty or undesirability of 
transferring funds between states. Most federal programs necessarily (and 
appropriately) draw revenue from the nation as a whole and principally disburse it in 
a limited number of localities. For programs like flood control or disaster relief, the 
flow of funds intentionally spreads a specific event s costs over the economic capacity 
of the rest of the country. For programs like defense and agriculture, all states pay
taxes but procurement historically concentrates in certain regions. In social welfare 
programs such as Social Security and Medicare, all states both draw revenue and 
receive benefits, but in largely unrelated amounts.  Medicare 
On July 1, 1966, Medicare commenced its health insurance of the elderly. 
On July 1
1973, it expanded coverage to the long-term disabled. Congress intended this program
as alternative coverage for people who usuTall-yb la-ckserd oacicses s to health insurance, which
is usually available through an employer. 
programs is nationwide:
eligibilty for basic benefits is the same, regardless of the state in which the beneficiary
resides. 
Medicare is the common name for title XVIII of the Social Security Act, Health
Insurance for the Aged and Disabled. It primarily consists of two major programs. 
Part A Hospital Insurance pays for inpatient hospital care and other related 
care. 
Part B  Supplementary Medical Insurance pays for physicians
' servces 
outpatient hospital services, durable medical equipment, home health 
care, and other medical expenss. 
Medicare collects its revenue at the national level, aggregating its "contributions" from 
all states. It then "disburses" this money throughout the country from centrally 
administered trust funds. Accordingly, its only actuarial concern is that total program
income matches total program outlays. Medicare s financial structure does not 
distinguish between the specific sources of funds or their ultimate geographic 
destination. 
A contributions 
Par  Table 1: Operations of the hospital insurance 
fund, FY 1985 
Payroll taxes financed 91.3 percent of 
Source  $ millon 
the Part A program in 1985. The taxes 
levied on 115 milion current workers 
Payroll tax
 46490 
paid for servces to 31.1 milion  Railroad retirement transfers
 371 
beneficiaries. The Part A program also  Uninsured persons reimbursement
 766 
maintained a trust fund of about one- Voluntary enrollee premiums

Miltary wage credits

half year s disbursements to provide a 
Investment interest  3182 
small reserve against fluctuations in 
program experience. In 1985, about  Total revenue  50933 
28. 2 milion people age 65 and over  Total disbursements  48654 
and about 2.9 milion disabled people  Net change in HI fund  2279 
under age 65 were eligible for benefits 
Source: Board of trustees of the federal hospital 
under Part A. 
insurance trust fund. The 1988 annual report of 
the board of trustees of the federal hospital 
In addition, a small proportion of Part  insurance trust 
fund. Washington, DC: U. 
A financing comes from the Railroad  Government Printing Office, 1988: 35. 
Retirement Account for railroad 
workers, general revenue for deemed military service wage credits and certain  uninsured persons, and premiums paid by voluntary enrollees. Interest from the trust 
fund provides the balance of Part A revenue. Because states basically contribute to 
these sources in proportion to unrestricted federal revenue
, the balance of this 
inspection treats them as general revenue. 
On a long-range actuarial basis, adequate financing of the Part A program depends 
upon comparison of the actual tax rates specified by law with the corresponding 
program costs. The Part A trustees (the Secretaries of the Treasury, Labor, and
Health & Human Servces; and two public members) estimate the percentage of 
taxable payroll needed depending upon forecasts of the status of the 
economy, labor
force participation, and other factors that take into account different assumptions
about their performance, ranging from optimistic to pessimistic. 
Congress has adjusted the tax rate several times since the program 
s inception in order 
to keep pace with increased outlays. The rate in 1984 was 1.3 percent each, for 
employers and employees; and 2.6 percent for self-employed individuals. The 
comparable rates in 1985 were 1.35 percent and 2.7 percent. In 1986, they became
1.45 percent and 2.
9 percent. 
In addition, the m  mum amount of wages subject to taxation has been increased at 
various times in order to broaden the tax base. In the 1980s, this increase was 
scheduled to occur automatically on a yearly basis. In 1984, taxes were paid on up to 
$37 800 of earnings; in 1985, it was $39 600; and in 1986, $42 000. 
Currently, over four covered workers support each Part A beneficiary, but this ratio
will decline rapidly early in the next century. By the middle of that 
century, only about
two covered workers will support each enrollee. The anticipated 
reserves and 
financing of the Part A program cannot offset this 
demographic change, except by
using the most optimistic assumptions. The trustees project that the trust fund' 
exhaustion even before the .major demographic shift. Efforts 
to improve the efficiency 
and reduce the costs of the health care delivery system may moderate this projection. 
The Prospective Payment System for hospitals comprises one such cost containment 
efforts. 
Part B contnoutions 
The Part B program is financed on the actuarial principle that its trust fund should 
always be somewhat greater than the claims 
that have been incurred by beneficiaries 
but not yet paid. Part B financing comes from three principal sources: Premiums paid 
by or on behalf of Part B enrollees, general revenue, and interest from investment of 
the trust fund. 
Until 1973 , the premium covered half the benefit and administration costs of the Part 
B plus a contingency reserve. General revenue financed the other half of Part B 
costs. 
Beginning in July 1973, Congress limited premium increases to the percentage increase 
in monthly social security cash benefits and changed the premium adjustment 
period.  As a result, premiums steadily 
Table 2: Operations of supplemental medical 
contributed less to Part B, with 72.  insurance trust fund, CY 1985 
percent coming from general revenue in 
Source 
$ millon 
1985. 
Enrollee premiums  5613 
The Social Security Trust Funds hold all  General revenue  18250 
of the income not currently needed to  Investment interest  1243 
pay benefits and related expenses. The 
Total revenue  25106 
assets of the funds may not be used for 
Disbursements  23880 
any other purposes. They are invested  Change  1226 
in interest-bearing obligations of the 
S. government.  Source: Board of trustees of the federal 
supplementary medical insurance trust fund. The 
1988 annual report of the board of trustees of the 
Medicare admistration

federal supplementary medical insurance trust 
fund. Washington, DC: U.S. Government Printing 
The federal government principally 
Office, 1988: 26. 
administers the Medicare program 
through three agencies: the Social Security Administration (SSA) and the 
Health Care 
Financing Administration (HCF A) in the Department of Health and Human Services 
(HHS), and the Internal Revenue Service (IRS) in the Department of the Treasury.
Within HHS, administrative costs for the Part A program are less than 2 percent of 
total disbursements. For Part B, they are about 3 percent. 
The SSA is responsible for enrollng people into the Medicare program. 
This usually 
occurs at the same time they apply for retirement benefits, or two years after receipt 
of disability benefits. Nationwide, SSA is the primary public contact point for 
information on the program, biling problems, and provider participation. 
The HCF A determines the nature and extent of reimbursement for all covered 
servces. Through contractors, it processes all provider claims for reimbursement. 
has established mechanisms to monitor the quality of care provided. 
The IRS collects the Medicare taxes from employers and personal income tax filings 
and deposits this money in the Trust Funds. The Secretary of the Treasury is the 
managing trustee of the Part A and Part B trust funds, and is responsible for actually 
executing all Medicare disbursements to states in the form of payments to carriers (for 
Part A claims) and fiscal intermediaries (for Part B claims). 
Medicare fiances

Both Part A and Part B are intended to be actuarially sound. To accomplish this 
objective, the accrual of funds in each trust fund should "in the long run" balance its 
disbursements of funds. This calculation of the necessary levels of accruals and 
disbursements derives from actuarial calculations of national economic
, demographic 
and health care trends.  For Part A, fiscal soundness is based upon the ratio of the amount 
of payroll tax 
dollars coming in as contributions from covered workers to the amount of Medicare 
dollars being paid out to beneficiaries through fiscal intermediaries and carriers. This 
ratio changes constantly based on changes in the national and statewide 
economy, 
population age, health status, and health care utilzation factors. 
Part B depends less upon the ratio of contributors to 
beneficiaries. Subscribers' fees 
comprise about 25 percent of Part B funding during the study period. 
The remaining 
75 percent from of general revenue remains subject to the fluctuations 
discussed 
above. 
Methodology 
The first phase of this inspection collects publicly available data sources. These 
sources include federal government statistics and private data for the year 
1985. This 
phase includes a state-by-state calculation of contributions and disbursements to and 
from the Part A and Part B trust 
funds. This information demonstrates the basic flow 
patterns between states due to Medicare, identifying jurisdictions with net losses and 
net gains. 
The second phase of this inspection adjusts these "crude" amounts by controllng for 
state size. A particular state s large flow of Medicare funds may derive from its being 
a large state, rather than from unique features of the Medicare program. Accordingly, 
this phase divides Part A and Part B contributions, disbursements, and nets by 
beneficiaries, population, employment, and gross state product to obtain ratios for 
comparison. In addition to reducing the impact of large states, this two dimensional 
analysis use the coefficient of variation to identify individual causes that influence the 
flow of Medicare funds. This methodology emphasizes the effect of outlier states that 
most deviate from mean relationships even upon controllng for state size. 
The third phase of this inspection performs multivariate analyses to control for the 
interaction between the single causes identified in phase two as influencing the flow of 
Medicare funds. For example, if state wealth and state health facilities each 
individually affect flow, what effect to they exert together? Wealthier states have 
greater health care resources and facilties, causing intercorrelation of any variables 
selected for their measurement. This pqase s analyses test individual causes for 
significance, eliminates outlying cases, performs a stepwise regression, eliminates post-
regression outliers, and compares the model's predicted values with actual values to 
analyze the residuals. 
Data sources

The SSA publishes annual statistics about payroll tax collections, both employee and 
self-employed. In 1985, the Part A program received 2. 7 percent of the 14.1 percent
tax for "old age, survivors, and disability health insurance" (OASDHI) contributions.  1.) 
The Part A and Part B trustees report essentially the same dollar amount 
of payroll
tax revenue. (Appendix 
Different statistical series vary in their definitions of "outlying" areas. Appropriate
comparison therefore requires careful attention to data sources. For OASDHI 
outlying areas include revenue from Puerto Rico, Virgin Islands, Guam, American 
Samoa, sailors, and expatriates. It does not include miltary personnel, who fall into 
the "other" category. The armed forces apparently transfer their $4.
7 bilion in payroll 
taxes to Medicare without attributing it to particular states. Indeed
, assigning military
personnel to states presents a variety of problems for any statistical series. 
Additionally, military personnel receive essentially no Medicare benefits 
prior to 
leaving the servce. 
The Part A and Part B trustees annually report the amount of general revenue each 
trust fund receives, but do not break the totals down by state. The Tax Foundation 
estimates each state s overall federal tax burden which consists principally of general
revenue. Accordingly, this inspection divides total Part A and Part B general revenue
by the state s proportion of the overall federal tax burden to estimate its contribution. 
The Tax Foundation does not estimate the federal tax burden on outlying 
areas or 
other." The Internal Revenue Service reports 1.48 percent of federal revenues derive
from outlying areas, international operations, and unallocated receipts. 
Unfortunately, it does not separate these components. Accordingly, this analysis takes
this proportion as a reasonable approximation of their federal tax burden. (Appendix 
Every two years, the HCF A tabulates the number of Part B beneficiaries in each state. 
For 1985, this inspection multiplies this number by $186, the premium that year. This 
total dollar amount closely approximates the actual collections reported by the trustees 
of the Part B fund. (Appendix 3. 
The HCF A's Part B enumeration includes outlying areas, but not "other." The SSA 
annually reports the number of Part A enrollees 
with a separate category for overseas 
beneficiaries. This inspection therefore uses the SSA data for "
other.
The HCFA also annually aggregates Part A and Part B 
disbursements by state. 
combines billng information from the different Medicare carriers and 
fiscal
intermediaries by state of beneficiary 
residence. This data contains some preliminary
and interim bils that remain subject to slight adjustments at final settlement. These
marginal changes (closely on the order  001 percent) should not significantly affect 
of 0.
the state by state totals. (Appendices 4 and 5.  ";'\ 
FINDINGS

Interstate flow of Medicae fuds 
This inspection divided the United States into 53 jurisdictions: 50 states, District of 
Columbia, outlying areas, and "other." In 1985 they contributed $75.7 billon to 
Medicare revenues and received $70.5 billon in disbursements. The $5.2 bilion 
difference accumulated in the Medicare trust funds or went to inter-
fund borrowing. 
Theoretically, negative transfers out of the trust funds would eventually offset the 
current increases in reserve balances. (Appendix 6. 
Figure 1: States with Medicare net gains 
Sixeen states receive a "net gain" of $4 237 milion more in total Medicare 
disbursements than they made in total Medicare contributions. Florida and 
Pennsylvania each gain over a billon dollars more from Medicare than they pay in 
revenues. Missouri, Mississippi, West Virginia, Alabama, and Arkansas (in descending
order) each net over $100 milion 
from Medicare. Arizona, California, Rhode Island 
Maine, Louisiana, Kentucky, North Dakota, South Dakota, and Iowa gain over $10
millon. 
Thirt-seven jurisdictions suffer a "net loss" of $9,438 millon to Medicare. New York 
and Texas each contribute over a billon dollars more into revenues than they receive 
in disbursements. "Other " New Jersey, Virginia, outlying areas, Connecticut, North
Carolina, Colorado, Minnesota, Georgia, Maryland, Alaska, Utah, Washington, Ohio
Indiana, Wisconsin, District of Columbia, Oklahoma, Delaware, and Massachusetts (in
order) each lose in excess of $100 millon. Except for Nevada and Kansas, the  , "
Figure 2: States with Medicare net losses 
remaining states each give over $10 millon net to Medicare. 
For all 53 jurisdictions 
the average total net transfer totals $99.0 millon (s 459.  , V 464.5). 
: States with Part A net gains  As noted in the preceding section 
Figure 
other" and outlying areas include some 
statistical anomalies. For revenue 
purposes  other" encompasses OASDHI 
contribution from active duty miltary 
personnel and revenues not otherwse 
accounted for. However, these sources 
do not receive any Medicare 
disbursements, skewing the apparent net 
loss. Similarly, outlying areas receive 
credit for tax contributions due to 
international transactions and 
unallocated receipts. The accompanying graphics show amounts for outlying areas 
combined together at Puerto Rico s location, southeast of Florida. Amounts for 
other" also appear offshore, but east of Georgia. 
Separate calculation of Part A contributions and 
disbursements produces a pattern
similar to that of Medicare as a whole. On average, Part A causes a $66.6 millon net 
transfer (s 379. , V 571.3). 
states with net gains from Part A also enjoy similar gains for all of Medicare.
Most 
Part A transfers over $1 bilion to 
Florida. Pennsylvania, Missouri, Mississippi, West  Virginia, Alabama, Louisiana, Ilinois 
Figure 4: States with Part A net losses 
and Kentucky (in order) each gain over 
$100 milion from Part A. Ilinois 
South Carolina, Tennessee, and Nevada 
each have Part A net gains, despite 
suffering an overall net loss to 
Medicare. 
Conversely, Part A withdraws over $1 
from New York and 
bilion annually 
ff. " 
other." Texas, New Jersey, Virginia 
California, Connecticut, Minnesota 
North Carolina, Colorado, Georgia, Maryland, Alaska, District of Columbia, Utah 
Delaware, Massachusetts, and Michigan (in order) each lose over $100 milion. Only 
California s $433 milion net gain from Part B more than offsets its $358 millon loss to 
Part A for an overall gain from Medicare. 
The smaller Part B program differs even 
Figure 5: States with Part B net gains

more from the overall Medicare net 
distribution that does Part A. It also 
shows higher variance with an average 
net transfer of $33 millon (s 153. , V 
571.3). 
Florida, California, Pennsylvania, and 
New York each enjoy Part B net gains 
of over $100 milion. However, New 
= York, District of Columbia, Oregon, and 
Michigan stil suffer Part A net losses 
larger than their Part B net gains.

Texas, outlying areas, New Jersey, 
Figure 6: States with Part B net losses

Ilinois, Virginia, Indiana, Ohio, North 
Carolina, Colorado, Oklahoma 
Connecticut, and Louisiana (in order) 
each suffer a net loss of over $100 
milion to Part B. Missouri, Mississippi 
Alaska, Maine, Louisiana, Kentucky, 
North Dakota, South Dakota, Iowa, and 
Kansas (in order) net more from Part A 
than they relinquish to Part B in net 
losses. 
The ratio of a state s contributions to disbursements quantifies its net gain or loss 
while controllng for the size of both contributions and disbursements. The average 
state contributes 111.5 percent of its disbursements (s 0. 282, V 31.5). Florida, West  Figure 7: Ratiod ofi Msebdicuarre scoentrmibuteionns tovse r Virginia, and Pennsylvania have ratios of
less then 0.  , demonstrating their net 
gains to be systematic and not merely a 
function of their large size. Conversely, 
Alaska, outlying areas, and "other 
contribute more than three times as 
much into Medicare revenue than they 
receive in disbursements. For Alaska 
this ratio represents a real transfer of 
finds to outside the state. The latter
JJ 
two jurisdictions reflect data collection 
anomalies. Since "other" receives no 
disbursements, it has an infinite ratio (truncated to six in the figure). 
(Appendix 7. 
Uniarate 
analysis of possible causes 
Table 3: Coefficient of variation (V per 
beneficiary, population, employee, and gross 
Superfcial inspection of the interstate  state product 
flow of Medicare funds suggests the 
Per:  Benefi- Popul- Empl- Gross
need to control for state size. For  ciary ation oyee 
state 
example, New York, New Jersey, and  product

Pennsylvania should possess similar  Par A

inventories of health care servces, but  Contribution  74.  33.4  30.

27. 
have quite different flows of Medicare 
Disbursements  24.  31.  31.0 
funds. In addition, contributions do not 
34. 
necessarily relate to disbursements. For  Net  364. 1 356.3 367. 
contributions deriving from payrolls  470. 
employment related variables might best 
quantify state size. For contributions  Par B 
dependent on general revenue  Contributions  55.  18.  21. 
34. 
population or gross state product may 
Disbursements  28.  35.  34. 
best measure size. For disbursements  36. 
size may mean the number of  Net  234.  146.  162. 
beneficiaries.  188. 
Total Medicae 
Controllng for beneficiaries, population 
Contributions  66.  26.  24. 
employment, and gross state product 
24.4

tests possible causes for the state by 
Disbursements  24.  31.  30.

state distribution of net gains and losses.  33.

It has the secondary advantage of  Net  310.  239.4 248.
limiting the interstate variance.  299.

HDwever, units of measurement affect

the variance, obscuring comparison of possible causes that have different scales.

The coeffcient of variation (V) better quantifies the relative variation by eliminating 
the units of measurement. It identifies the following 
relationships having low variation
and therefore being likely causes of the interstate flow of Medicare funds.  BENEFICIAIES Part B contributions and total disbursements.
POPULATION Part B contributions. 
EMPLOYMENT Part A, Part B, and total contributions. 
GROSS STATE PRODUCT  Part A and total contributions. 
These relationships conform to intuitive expectations that disbursements follow 
beneficiaries, while contributions derive from a state s ability to pay. Dividing by these 
measures of size also highlights the outlier states that most diverge from measures 
central tendency. 
Benciri
Figure 8: Part B contributions per beneficiary The number of beneficiaries in a state
directly affects both its premium 
contributions to Part B (Pearson r 0. 
P -c 0.0001) and the total disbursements 
to the state (Pearson r 0. 
, P -c 
0001). Dividing Part B contributions 
by beneficiaries controls for states whose 
populations consist disproportionately of 
the elderly (e.  , Florida, Arzona). 
, the decreasing fraction of Part 
A However
tiB financed by beneficiary premiums
weakens any causal linkage. Alaska 
Wyoming, outlying areas, Colorado, and the District of Columbia make the largest 
Part B per beneficiary contributions. In the first four jurisdictions the elderly 
constitute unusually small proportions of their total populations. 
The District of 
Columbia has a higher per capita income than any state and therefore makes an 
unusually large contribution to general revenue. "Other " Arkansas, West Virginia 
Mississippi, and South Dakota have the lowest Part B contributions per beneficiary. 
Other" has essentially no beneficiaries, while the rural states suffer from low average 
incomes. (Appendix 8). 
Similarly, dividing total Medicare disbursements by beneficiaries identifies the District 
of Columbia, California, Michigan, Ilinois, and Nevada as having high costs per
beneficiary. The two former locales have disproportionately comprehensive health 
care facilties. However, no causal characteristics particularly distinguish the latter 
three states. "Other " outlying areas, Utah, Montana, and North Carolina have the 
lowest costs per beneficiary. "Other" has no beneficiaries and therefore no 
disbursements. Utah enjoys a reputation for healthy lifestyles and low morbidity. The 
remaining areas could have either lower cost or lower intensity health servces. 
Population , "

Figure 10: Part B contributions per population Figure 9: Medicare disbursements per beneficiary
Population directly measures a state s size. Its correlates (Pearson r 0.  0001) 
, P -c 0.
significantly with Part B contributions. This relationship also has the lowest coefficient 
of variation. Dividing Part B contributions by population, Connecticut, New Jersey, 
District of Columbia, Alaska, and Massachusetts have the highest quotient. These 
jurisdictions also enjoy relatively high average incomes. "Other " Utah, Mississippi
Idaho, and South Carolina come in lowest. "Other" scores low because it has no 
beneficiaries and therefore no beneficiary premiums. Mississippi, Idaho, and South 
Carolina have relatively low average incomes. Utah has a low proportion of elderly 
residents; however, so does Alaska. (Appendix 9). 
Employent 
Figure 11: Medicare contributions per employee 
The number of employees in a state 
indirectly quantifies its economic 
activity. In particular, employment 
significantly correlates with contributions 
0001). Dividing 
(Pearson r 0.  , P -c 0.
total Medicare contributions by 
employment identifies the District of

, outlying 
0 -
Columbia, Delaware, Alaska
areas, and New York as making higher

than average contributions, especially
OASDHI and general revenue. These jurisdictions have higher average earnings and 
presumably higher rates of taxation. Mississippi  other " South Dakota, Maine, and 
Kentucky make the lowest Medicare contributions per employee. The four states have 
lower average incomes, but "other" includes considerable non-wage income attributed 
for accounting purposes. This revenue should artificially inflate the average income of 
the miltary personnel in this group, suggesting unusually low average incomes among 
the miltary. (Appendix 10).  Gross State Product 
product 
Gross state product parallels the
Figure 12: Medicare contributions per gross state 
economic definition of the gross national 
product, but for a 
single state. It 
directly measures the size of a state 
economy and significantly correlates 
with total Medicare contributions 
(Pearson r 0.  , P -( 0.0001). Unlike 
number of employees, it accounts for 
differences in their average earnings and 
includes unearned income. Calculating 
total contributions as a percentage of 
gross state product, outlying areas 
devote 4.2 percent of their total economic activity to paying for Medicare. "Other 
(3.0 percent), Delaware (2.7 percent), Rhode Island (2.2 percent), and New York (2. 
percent) follow with successively lower fractions. These areas have high average
incomes, suggesting that Medicare uses relatively progressive methods to raise its 
revenues. Wyoming (1.1 percent), Alaska (1.1 percent), Louisiana (1.4 percent), New 
Mexico (1.4 percent), and the District of Columbia (1.5 percent) contribute the 
smallest proportions of their economies to Medicare. However, Alaska and the 
District of Columbia have the highest per capita personal incomes in the nation. 
Their residents must therefore have atyically light Medicare tax burdens. (Appendix 
11). 
Multiarate analysis of possible causes 
Table 4: Variables measuring possible causes of 
FICA contributions to Part A 
Controllng one measure of state size at 
State ecnomic healh 
a time emphasizes the effect of the 
Failed businesses per capita 
other possible causes of Medicare funds  Employed persons per capita 
flows. For example, controllng for  Persons receiving public aid 
population highlights the importance of  Unemployment rate 
states with above average incomes.  Lar 
force
Measuring the interaction between 
Per capita persons in the civilan labor force

possible causes therefore requires a 
Proportion of population 18-64 years old

multivariate analysis of contributions 
and disbursements. Also, the previous  Income
phase emphasizes outliers, whereas a  Disposable income per capita
multivariate analysis eliminates outliers.  Annual pay per capita 
Personal income per capita 
Hourly earnings per capita 
Part A contrbutions: Payroll 
Part A contributions derive principally from OASDHI. Three possible causes appear
most likely to affect the size of a state s FICA tax:  + ++++++  + ++"'+ + ++  ++ ++  +++ ++++
Figure 13: FICA predicted by disposable  FIC  n = f(state economic health , labor 
3 income). 
income force
230
220 If a state has a vigorous economy with low
210
unemployment and relatively high wages
200
then more dollars from its wage earners
.90
should go into the Part A trust fund. If 
180
+1+
.70 state has a high proportion of its residents in
the labor force, it should contribute more 
150
money to Medicare. Finally, states with high 
140
it +
 average incomes should yield more payroll 
13D
120 taxes, at least until large numbers of 
110 residents reach the cap on FICA taxes. 
100 +

Ten publicly available variables measure
Per cap1ta 1Jecae Ct thousand) 
these three causes. Correlation coefficients 
and scattergrams identify per capita disposable income, per capita civilian labor force 
members, and unemployment rate as attaining significance levels of p c: 0.05. 
Figure 14: Accuracy of Part A FICA predictions 
1.40
1.30
1.20
1.1.0
1.00
110  130
Predicted
Scattergrams also eliminate Alaska and the District of Columbia as outliers. 
Upon
rescaling without these two outliers, Florida also becomes an outlier. Alaska 
presumably outlies because it consists disproportionately of young people, while 
Florida outlies because it 
consists disproportionately of the elderly. The District of 
Columbia has higher per capita income than any state except 
Alaska and Connecticut.  After removing these thre;e jurisdictions and rescaling again, New York, New Jersey,
Connecticut, and Delaware- become outliers. This status apparently derives from the 
commuting patterns of their respective work forces. Employer location, not employee
residence, determines what state receives credit for their FICA taxes. All these states 
have a high proportion of residents who commute either into or out of the 
state to 
work. 
A stepwise regression identifies the strongest explanatory variables. Upon such 
analysis of the three significant variables against FICA payroll contributions (p .c 
01), only per capita disposable income significantly explains the variance in
OASDHI. A straight regression analysis at the 0.15 significance level finds that per
capita disposable income accounts for 71 percent of the variance among states for 
FICA payroll taxes, a very strong correlation. 
The final phase of this part of the analysis compares the predicted values for FICA 
contributions to the actual FICA contributions. In a perfect predictive model
, we
would expect all the values to fall on the 45 degree line. 
Random errors account for 
each state s divergence from the predicted value. The very strong 
relationship
between the predicted values and the actual 
values shows the model to be both 
precise and valid.
Part A contrbutions: General revenue  Table 5: Variables measuring possible causes of
general revenue contributions to Part A
A smaller proportion of Part A 
Average annual pay 
contributions come from general 
Personal income per capita 
revenue. A state s ability to contribute 
Hourly earnings per capita
to general revenue depends largely  Civilan labor force
upon its economic vigor. Six variables  Total employment
available from public data sources  Failed businesses per capita
Persons receiving public aid per capita
quantify this possible cause. 
, ed. 
Source: Horner ER Almanac of the fift 
As with the FICA analysis, correlation  states, 1988. 3rd ed. Palo Alto, CA: Information 
with scattergrams identifies significant  Publications, 1988. 
variables. Repeated correlation with 
scattergrams and rescaling, eliminates outlier states. 
Stepwise regression selects per capita personal income and annual pay as being 
statistically significant allowing for their mutual predictive interaction. 
Together they 
3 percent of the variance in general revenue 
explain 93. contributions to Part A, a very 
good fit. Both these 
variables related to a state s capabilty to pay into federal general 
revenue. This finding suggests that general revenue contributions to Part A comprise 
a relatively progressive manner of funding.  + + 
++ + + ++ - ++++  + ++
Figure 15: Accuracy of Part A general revenue predictions
+ -I
.t +
Predicted 
Part A disburements 
Table 6: Variables measuring 
possible causes of disbursements
After controllng for state size, Part A  from Part A
disbursements should principally depend upon the  hea

Population 
population s physical health, the health care 
General health index
resources available in the state, and the age  Average life span
distribution of the Medicare population.  Severity of disease index
General lifestyle index
Average work time lost to ilness
out = f (population s physical health4, health 
care resources , Medicare age distribution 
Heah cae resurce
Physicians per capita
This model considers 12 variables that measure  Hospital beds per capita
these three possible causes. For physical health Occupation rate of hospital beds
the Northwestern National Life Insurance  Short term hospital stays per capita
Company annually publishes computed indices for
Medicae age distribution
each state s general health, lifestyle, and disease 
Percent age 65 to 74
severity from various health measures. Assuming 
Percent age 75 to 84
that a state has a stable population, unhealthy  Percent age 85+ 
young people will become unhealthy elders. 
The relative danger of working in a states major industries, the strength of its laws on 
factory emissions, and other occupational hazards also affect the overall health status 
of its population. Where significant numbers of workers consistently miss work 
because of ilness but stay in the work force, Medicare receives less contributions from 
the state. At the same time, the persons who suffer il health throughout their  :j 
-.  ++  +++  ++++ + + ...+ +++   ,:.+.+.+ ++  +  ++ - - ,.. 
Figure 16: Part A disbursements predicted by working years retain diminished health status
genera! health index 
as elders, thus increasing their utilzation of 
300  health care services reimbursed through the 
Medicare trust fund. 
200  I + ++ According to numerous studies, the 
-1  availability of high intensity health servces 
*t +
results in their -increased utilzation.7 This 
+-f + trend applies to both necessary servces (e.g. 
a person with a serious ilness might not 
100 
drive fifty miles to have it checked, while a 
person one mile from servce probably will 
seek health care) and to increased requests
for elective procedures. This variable does 
-:1  .-_u..  not change the absolute numerical ratio of 
Genenl healtll I11ez 
contributors to beneficiaries, but can affect 
the number and tye of services utilzed by Medicare-eligible persons so as to change
the cost of-ervng 
beneficiaries in a particular area. 
Additionally, the need for health services  Figure 17: Part A disbursements predicted by 
may initiate the creation of a medical  physicians per capita 
center. Once established, the medical 
300 
center then generates further demand for 
its servces. Over time, health care 
resource availabilty can indirectly increase 
the consumption of Medicare servces.  ZIJO  +T* t+
The age structure of the Medicare 
population may also affect Part A 
disbursements. Persons 85 years of age and  100 
older tend to be il more often 
than persons 
aged 65-84. The former group of so-called 
old-old" also tend to have ilnesses that 
210 260 
require more health care resources than do 
310 
nYS1C1aD.  per 1.000 r851denu 
the latter group of "young-old." The use of 
Medicare benefits could therefore vary with the age structure of the elderly 
population. 
Correlation and scattergram of these variables with Part A disbursements, eliminated 
variables with weak associations (p 
-c 0.05). The general health index, physicians per
capita, hospital beds per capita, and percentage of the Medicare population between 
the ages of 65 and 74 years proved to be significant. 
Regression and rescaling 
eliminate outlier states. 
In a stepwise regression, all four of these variables remain 
significant at the 0. 
confidence level. An ordinary least squares regres
sion using these variables explains  ++++ 
+ ++ +++ ++ + '**+ "*++ ++ +-+j++   ++ +:++\+  +++ +   +++ 
Figure 18: Part A disbursements predicted by 47 percent of the variance in Part A 
hospital beds per capita benefits. 
300 
Figure 19: Part A disbursements predicted by 
:t  Medicare population aged 65-74 years 
300
200 
:t ++ 
+ 11 + 
200 
100
+f + 
100
BOSpU81 bed
The final phase of the Part A
disbursements analysis consists of a 
. beneUCla(les 65-
multivariate, straight regression using
ordinary least squares. This procedure compares the amounts predicted jointly by the
four significant variables to the actual payments in each jurisdiction. Together, they.
account for 47.2 percent of the variance. An analysis of the residuals shows a strong 
relationship between predicted and actual values
, and reflects a good model. 
Figure 20: Accuracy of Part A disbursement predictions 
300
200
100
140  190  240  290
Predicted -+- -++ + + +++  -++  ++
Part Bcontrbutins: Beneficiary premiu 
As previously noted, beneficiary premiums comprise about one-quarter of
contributions to Part B. This component of Medicare funding does not warrant 
multivariate analysis. Beneficiaries each pay a flat rate for their Part B coverage, $186 
in 1985. Accordingly, a state s premiums make up a linear function the number of 
beneficiaries among its residents. Controllng for population, employee, or gross state
product predicts premiums less accurately because of these measures
' systematic 
differences and inherent variance.
=GR  + SP 
where GR  represents the general revenue contribution attributable to each state and 
denotes the total premiums for all subscribers in the state. 
Part B contrbutions: General revenue
The analysis of general revenue contributions to Part B parallels the procedure and 
results for general revenue contributions to Part  It uses the same six 
variables as 
prospective measures of states' economic health. Correlation tests eliminate 
nonsignificant variabl s. Repeated correlation and rescaling removes outlier states. 
Figure 21: Accuracy of Part B general revenue prediction 
:100 
+-t -+
:100
Predicted 
Stepwise regression identifies the variables that in the aggregate best explain general
revenue contributions to Part B. Again, only per capita personal income and hourly  ++  +++++ +.+ -+  +++ +  +++ .. '" ++ ++ +++  +++ + + + 
earnings contribute significant predictive information. Together, they account for 93.4 
percent of interstate differences in general revenue. 
B disburements 
Part 
Figure 22: Part B disbursements predicted by The modeling of Part B disbursements starts 
physicians per capita with the same three possible 
causes as 
quantified by the 12 variables used for Part 
A disbursements. The same rationales as for 
130 
Part A disbursements apply to selection of 
120 
these variables for Part B disbursements. 
110 
100 
out = f(population s physical health, health 
care resources, Medicare age distribution) 
70 + + + +  Correlating individual variables with Part B 
60 + ++(cid:1) disbursements to eliminate weak associations 
the same four variables attained significance 
160 Z1D 260  at p '" 0.05. Correlation and rescaling 
110  :no  '60  removes outlier states.
Pbrs1c18DS per 1. 000 reSlden.ts 
The four variables remain significant through 
Figure 23: Part B disbursements predicted by 
a stepwise regression where p '" 0.01.  state health index 
However, in an ordinary least squares 
regression at p '" 0. 15 only two variables  130 
physicians per capita and general health 
120 
rating, continue to be significant. These two 
110 + 
variables jointly explain 33 percent of the 
variance in Part B benefits to states.  100 
The final phase of the analysis compares the 
disbursements predicted by this model to the 
actual amounts paid out. An analysis of the  + t + 
residuals demonstrates a strong relationship 
between the model's predictions and the 
actual benefits. 
Gen.nl beBltl.1 U.deJ: 
Conclusion 
This data shows that Medicare creates large changes in the flow of funds into and out 
of states. The aggregate, net amounts seem to be random on superficial inspection. 
However, upon individual analysis the Part A and B contributions and disbursements 
do significantly associate with logical causes such as average income, proportion of 
elderly residents , and availability of health care servces. The juxaposition of unusual 
combinations of characteristics in a state accounts for the seeming randomness of the 
flow of Medicare funds (e.g., high average income and few elderly residents).  + ++++
Accordingly, the net flow of Medicare funds discharges the program s current 
legislative objectives. Policy manipulations of this flow should address the underlying 
causes, rather than directly affecting the flow itself. Medicare contributions and 
disbursements constitute a important share of some states' total revenues. 
Figure 24: Accuracy of Part B disbursement prediGt---
1.40 
1. 
1.20 
1.1.0 
1.00 
1.1.0  1.30 
Predicted  , "
REFERENCES

1. U.S. Department of Health & Human Servces, Health Care Financing Administration
Office of Research and Demonstrations. Health care financing -- program statistics: 
Medicare and Medicaid Databook, 1988. Baltimore, MD: Health Care Financing
Administration, 1989: 15. Table 2. 1. HCFA 
pub. no. 03270. 
2. Horner ER, ed. Almanac of the fifty states, 1988. 3rd ed. Palo Alto, CA: Information 
Publications
, 1988. 
3. U.S. Bureau of the Census. Statistical abstract of the United States, 1988. 108th ed. 
Washington, DC: U.S. Government Printing Office
, 1988. 
4. Northwestern National Life Insurance state health rankings: Results
, methodology, and
discussion, 1989 edition. Minneapolis, MN: Northwestern National Life Insurance 
Company, 1989. 
5. U.S. Bureau of the Census. Statistical abstract of the United States: 1988. 108th ed. 
Washington, DC: U.S. Government Printing Office
, 1988. 
6. U.S. Bureau of the Census. State population and household estimates, with age, sex 
and component of change: 1981-1987. Current population reports, series P- , no. 1024. 
Washington, DC: U.S. Government Printing Office
, 1988. 
7. For a more detailed discussion of the relationship between medical resource intensity 
and medical servces utilzation, see Hamilton, Robert  Crisis in the Health Care System 
Connecticut, May, 1990, pp. 95-100.  Appendix 1: Old age, survors, disabilty health insurance contributions by state, 1985 ($ millon) 
State  Total OASDHI contributions  Part- A COl1tl'ibutions: 
Wage  Self  Total  Wag  Self  Total 
2750  170  2920  527  559 
771  820  148  157  1. Diez G & Long W.  OASDHI covered 
-AZ  2627  166  2793  503  535  workers.  Social Security Bulletin, Annual 
1698  136  1834  325  351  Statistical Supplement, 1988: 136.  Table 
BlO. 
25434  1908  27342  4870  365  5236 
2. OASDHI contributions * 2.7 /14. 
.CO  2943  241  3184  564  610 
4145  234  4379  794  838  Puerto  Rico  Virgin  Islands  Guam 
1132  1162  217  223  American Samoa, ocean-going vessls, and

S. citizens employed abroad by American 
1556  1588  298  304 
employers. 
8335  635  8970  1596  122  1718 
311  5175  931  991  Armed  forces  and  funds  otherwise 
unaccounted for. 
838  890  160  170 
694  758  133  145 
11931  663  12594  2285  127  2412 
4626  281  4907  940 
2115  222  2337  405 
2047  199  224  392  430 
2162  190  2352  414  450 
3057  202  3259  585  624 
682  756  131  145 
4309  224  4533  825  868 
6434  401  6835  1232  1309 
10397  412  10809  1991  2070 
4593  285  4878  880  934 
1240  120  1360  237  260 
45%  295  4891  880  936 
515  575  11 .  110 
1328  139  1467  254  281 
;'N  744  793  142  152 
943  1020  181  195 
8879  480  9359  1700  1792 
976  1047  187  200 
24635  981  25616  4717  188  4905 
4895  336  5231  937  1002 
427  506 
10729  516  11245  2055  2153 
2471  204  2675  473  512 
2370  178  2548  454  488 
11189  666  11855  2143  128  2270 
942  995  180  191 
2196  144  2340  421 
400  470 
3714  25'  3972  711  761 
13976  1036  15012  2676  198  2875 
1100  1175  211  225 
398  436 
4628  296  4924  886  943 
3647  285  3932  698  753 
1130  1200  216  230 
4632  252  4884  887  935 
375  407 
Outlyini  1654  1741  317  333 
Other  4677  4677  896  896 
Total  229548  14128  243676  43956  2705  461  Appendix 2: General revenue contributions by state
, 1985 
State  Federal tax burden  $ millon 
General revenue 
$ milion  percent  Part  Part B  Total 
8996  1.25  238  294
1. Tax Foundation. Memorandum on the allocation

2355  0.33 
8271  1.5  219  270  of the federal ta burden and federal grants-in-aid by 
5011  133  164  state, fiscl year 1988. 
2. Board of trustees of the federal hospital insurance 
86183  11.97  532  2280  2812 
fund. The 1988 annual report of the board of 
10178  1.41  269  332 
13282  1.84  351  433  trustees of the federal hospital insurance fund. 
Washington, DC: U.S. Government Printing Offce 
1994 
1988: 36. 
2506  0.35 
33177  205  878  1083  3. Board of trustees of the federal supplementary 
15395  407  502  insurance fund. The 1988 annual report of the 
2974  0.41  board of trustees of the federal supplementary 
2179  0.30  insurance fund. Washington, DC: U.S. Government 
Printing Offce
38475  5.34  237  1018  1255  , 1988: 26. 
4. Projection from federal individual income tax 
14915  395  487 
8078  1.2  214  264  receipts. U.S. Department of Commerce, Bureau of 
the Census. Statistical abstract of the United States 
7480  1.04  198  244 
8502  1.8  225  277  1989. 109th ed. Washington, DC: U.S. Governmen 
11522  1.60  305  376  Printing  Offce  199;  Table  504.  Includes 
2752  0.38  international operations and unallocated receipts, in 
15193  402  496  addition to outlying areas. 
20451  126  541  667 
26213  162  694  856 
1247  1.73  330  407 
4948  131  162 
14124  1.96  374  461 
4433  117  144 
3005  0.42 
3142  0.44  102 
29802  184  789  973 
3409  0.47  111 
59251  366  1568  1934 
15225  403  497 
1889 
30657  189  811  1000 
9101  1.26  241  297 
7047  186  229 
34297  212  908  1120 
2896  0.40 
7391  1.03  196  242 
1641 
11605  1.61  307  379 
50557  312  1338  1650 
3669  0.51  120 
128 
17305  2.40  107  458  565 
13232  1.84  350  432 
4183  0.58  111  137 
13153  1.83  348  429 
1537 
Outlying  1061  1.48  282  348 
Other 
Total  720041  100.  4443  19053  23496  Appendix 3: Part B premium contributions by state, 1985 
State  Beneficiariesl Premiums 
(thousand) ($ millon) 
519
1. U.S. Department of Health & Human Servces
, Health Care 
395 Financing Administration, Bureau of Data Management & Statistics.
Medicare program statistics: Medicare enrollment 
358 1985. Baltimore 
MD: Health Care Financing Administration
2858  532 , 1989: 19-20. Table 
HCFA pub. no. 0326. 
294
2. Number of beneficiaries * $186.
426
3. From foreign countries.
4. Moaney-Howze A Hospital insurance: Number of enrollees, by 
1965  366 state, July 1, 196-87. Social Security Bulletin, Annual Statistical 
637  118 Supplement, 1988: 285. Table 7.B3. 
114
1407  262
680  127
428
336
482
453
166
463
797  148
1108
538  100
334
719  134
103
223
121
1006  187
145
2361  439
756  141
1373  255
408
364
1779  331
145
369
101
615  114
1561  290
131
613  114
519
283
652  121
Outlying  303
Othe  230
Total  30199  5617 Appendix 4: Total Part A contributions and disbursments by state, 1%  ($ milIon) 
State	 Contributed  Disbursed  Net 
OASDHI  General  Total 
559  615  775  160 
1. U.S. Department of Health & Human Services 
157  172  143 
Health Care Financing Administration, Bureau of 
535  586  630 
351  382  462  Data  Management  and  Statistics.  Medicare 
5236  532  5768  5410  358  estimated benefit payments, calendar year 1985. 
610  672  451  221 
838  920  665  255 
235  120  115 
304  320  180  140 
1718  205  1922  3148  1226 
991  1086  893  193 
170  189  133 
145  159  137 
2412  237  269  2772  123 
940  1032  1026 
448  497  564  -67 
430  476  515 
450  503  624  121 
624  695  839  144 
145  162  242  -80 
962  811  151 
1309  126  1435  1322  113 
2070  162  2232  2124  108 
934  1011  774  237 
260  291  497  206 
936  1024  1373  349 
110  123  113 
281  308  293 
152  170  175 
195  215  165 
1792  184  1976  1547  429 
222  204 
4905  366  5271  3517  1754 
1002  1096  860  236 
109  142 
2153  189  2343  2317 
512  568  560 
486  531  484 
2270  212  2482  3269  787 
191  208  250  -42 
448  494  529 
100  131 
761  832  865 
2875  312  3187  2480  707 
225  248  119  129 
943  107  1050  666  384 
753  834  742 
230  256  427  171 
935  1016  931 
Outlying  333  399  134  265 
Other  896  896  896 
461 
Total  4443  51104  47582  3522  . "
Appendix 5: Total Part B contributions and disbursements by state, 1985 ($ millon)
State Contributed  Disbursed  Net 
Premiums  General  Total 
238  335  304
1. U.S. Department of Health & Human Servces 
Health Care Financing Administration, Bureau of 
219  292  326 
Data  Management  and  Statistics.  Medicare 
133  199  227 
estimated benefit payments
532  2280  2812  3245  -433  , calendar year 1985. 
269  324  202  122
351  431  315  116
366  878  1243  1821  578
118  407  526  445
262  1018  1280  1098  182 
127  395  521  372  149 
214  293  241 
198  260  222 
225  315  221 
305  389  105 
104 
402  488  410 
148  541  689  685 
206  694  900  996 
100  330  431  346 
131  193  179 
134  374  507  462 
117  159  101 
106
187  789  976  778  198
117
439  1568  2007  2159  152
141  403  543  412  131
255  811  1067  927  140 
241  317  198  119 
186  254  262 
331  908  1238  1573  335 
104  122 
196  264  184 
114  307  421  341
290  1338  1628  1110  518
121
114  458  572  401  171 
350  447  373 
111  163  180 
121  348  469  406 
Outlying  282  338  110  228 
Other 
Total  5617  19053  24670  22948  1722  Appendix 6: Net Part A and Part B contributions and disbursements by state, 1985 ($ milion) 
State Part A  Part B  Total 
Contributed  Disbursed  Net Contributed  Disbursed  Net Contributed  Disbursed  Net 
615  775  160  335  304  949  1079  130 
172  143  '27  194 
586  630  292  326  878  956 
382  462  -80  199  227  581  689  108 
5768  5410  358  2812  3245  -433  8580  8655 
672  451  221  324  202  122  997  653  344 
920  665  255  431  315  116  1351  980  371 
'25  120  115  302  177  125 
320  180  140  399  265  134 
1922  3148  1226  1243  1821  578  3166  4969  1803 
1086  893  193  526  445  1612  1338  274 
189  133  286  204 
159  137  237  199 
2649  2772  1'2  1280  1098  182  3929  3870 
1032  1026  521  372  149  1553  1398  155 
497  564  -67  293  241  791  805 
476  515  260  222  737  737 
503  624  121  315  221  817  845 
695  839  144  389  284  105  1084  11'2 
162  242  -80  104  265  319 
811  151  488  410  1450  1221  229 
1435  1322  113  689  685  2124  2007  117 
2'22  2124  108  900  996  3131  3120 
1011  774  '27  431  346  1442  1120  322 
291  497  206  193  179  484  676  192 
1024  1373  349  507  462  1531  1835  304 
1'2  113  196  173 
308  293  159  101  467  394 
170  175  268  264 
215  165  106  320  228 
1976  1547  429  976  778  198  2952  '225  627 
222  204  117  339  295 
5271  3517  1754  2007  2159  152  7278  5676  1602 
1096  860  '26  543  412  131  1639  1272  367 
109  142  175  199 
2343  2317  1067  927  140  3409  3244  165 
568  560  317  198  119  885  758  127 
531  484  254  262  785  746
242  3269  787  1238  1573  335  3720  4842  1122 
208  250  -42  104  122  312  372 
494  529  184  758  713 
100  131  162  180 
832  865  421  341  1254  1206 
3187  2480  707  1628  1110  518  4815  3590  1225 
248  119  129  121  369  197  172 
138  121 
1050  666  384  572  401  171  1622  1067  555 
834  742  447  373  1281  1115  166 
256  427  171  163  180  419  607  188 
1016  931  469  406  1486  1337  149 
136 
Outlying  399  134  265  338  110  228  737  244  493 
Other  896  896  938  938 
Total  51104  47582  3522  24670  22948  1722  75774  70530  5244  Appendix 7: Ratio of Part A and Part B contributions to disbursements by state
, 1985 
State  Part A  Part B  Total 
1.0 
5.51 
1.07 
1.49  1.60  1.53 
1.38  1.37  1.38 
1.96  1.7  1.70 
1.78  1.51 
1.22  1.8  1.20 
1.42  137  1.40 
1.6  1.27  1.9 
1.7 
1.02 
1.01  1.40  1.11 
1.22 
1.7 
1.00 
1.42 
1.37 
1.35 
1.9  1.9  1.9 
1.09  1.01  1.06 
1.05  1.00 
131  1.24  1.29 
0.59  1.08 
1.0 
1.09  1.22  1.3 
1.05  1.57  1.9 
1.0 
1.01 
NtI 1.30  1.68  1.41 
1.28  1.25  1.27 
1.09  1.29  1.5 
1.50  1.28 
1.27  1.32  1.29 
1.7 
1.01  1.5  1.05 
1.01  1.60  1.7 
1.0 
1.05 
1.44  1.06 
1.7 
1.24  1.04 
1.28  1.47  134 
1.56  1.87 
1.03  1.46  1.4 
1.58  1.43  1.52 
1.2  1.20  1.5 
1.09  1.6  1.1 
1.53  1.95  1.66 
Other 
Outlying 
Average  1.07  1.08  1.07  Appendix 8: Part A and Part B contributions and disbursements per beneficiary by state, 1985 ($) 
- State  Part A  Part B  Total 
Contributed  Disbursed  Net Contributed  Disbursd  Net Contributed  Disbursed  Net 
1185  1494  309  645  586  1830  2080  250 
10481  1771  8710  3992  855  3137  14474  2627  11847 
1484  1596  112  740  826  -85  2225  2422  197 
1067  1291  223  556  634  1624  1925  301 
2018  1893  125  984  1135  151  3002  3028 
2286  1533  753  1101  687  415  3387  2220  1168 
2160  1561  599  1011  739  272  3171  2300  871 
3147  1608  1539  893  764  129  4040  2372  1668 
4380  2467  1913  1095  1165  5475  3632  1843 
978  1602  -624  633  927  294  1611  2529  918 
1705  1402  303  826  699  127  2531  2101  430 
1922  1354  568  987  723  2909  2076  832 
1389  1200  189  691  543  148  2080  1744  337 
1883  1971  -87  910  781  129  2793  2751 
1516  1508  766  547  219  2282  2055  228 
1161  1317  156  685  563  122  1846  1879 
1419  1535  116  776  662  114  2195  2196
104  1296  252  653  459  194  1697  1755 
1534  1851  317  859  627  232  2392  2478  -85 
976  1459  625  464  161  1601  1924  323 
2077  1752  326  1054  169  3132  2637  495 
1800  1659  142  865  859  2665  2518  147 
2014  1917  812  899  -87  2826  2816 
1879  1438  441  800  643  157  2679  2081  598 
. MS  871  1488  -617  578  536  1449  2024  575 
1424  1910  -46  706  643  2130  2552  -423
:MT  1193  1097  712  583  129  1904  1680  224 
1385  1316  713  454  259  2098  1770  328
. I4v  1767  1814  -47  1010  923  2777  2737 
1774  1363  411  873  521  352  267  1884  763 
1963  1537  426  970  773  197  2933  2310  623 
1529  1408  121  808  628  181  2337  2036  301 
2233  1490  743  850  914  3083  2404  678 
1449  1138  312  719  545  174  2168  1683  486 
1195  1562  367  736  627  109  1930  2189  259 
1706  1688  777  675  102  243  2363  120 
1392  1372  776  485  291  2168  1857  311 
1461  1331  130  699  720  2160  2051  109 
1395  1837  -442  696  884  188  2091  2721  -630 
1438  1725  287  715  842  127  2153  2567  -414 
1338  1434  716  499  217  2054  1932  122 
989  1294  305  615  484  131  1604  1778  174 
1353  1407  685  . 555  131  2039  1961 
2041  1589  453  1043  711  332  3085  2300  785 
1892  909  983  928  596  332  2819  1505  1315 
1348  1313  688  472  216  2036  1785  251 
1711  1086  625  933  654  279  2644  1740  904 
1607  1429  178  860  718  142  2468  2148  320 
903  1508  -65  577  636  5':  1480  2144 
1558  1427  131  719  622  2277  2049  228
2010  1310  701  1120  574  546  3130  188  1247
Outlying  1317  442  875  1115  363  752  2432  805  1627
Other  3894  3894  186  186  4080  4080
Total  1692  1576  117  817  760  2509  2335  174  Appendix 9: Part A and Part B contributions and disbursements per population by state, 1985 ($) 
l Part A 
Population Part B  Total 
State (thousand) Contributed  Disbursed  Net Contributed  Disbursed  Net Contributed  Disbursed  Net 
4021  153  193  -40  236  268 
521  329  274  125  455  372 
3161  185  199  103  278  302 
2360  162  196  246  292 
-CA  26353  219  205  107  123  326  328 
3232  208  140  100  308  202  106 
3175  290  209  136  426  309  117 
626  375  192  183  106  482  283  199 
623  513  289  224  128  136  641  425  216 
11367  169  277  108  109  160  279  437  159 
5976  182  149  270  224 
1050  180  127  272  194 
1005  158  136  236  198 
11539  230  240  111  340  335 
5500  188  187  282  254 
2873  173  196  102  275  280
248 
195  210  106  301  301 
3724  135  168  219  227 
155  187  242  250 
1164  139  208  -69  228  274  -46 
4391  219  185  111  330  278 
5823  246  227  118  118  365  345 
9088  246  234  110  345  343 
4191  241  185  103  344  267 
2613  111  190  185  259 
5036  203  273  -69  101  304  364 
825  149  137  238  210 
1605  192  183  291  245 
939  181  186  104  285  281 
998  215  165  106  321  228 
7568  261  204  129  103  390  307 
1450  153  141  234  203 
17767  297  198  113  122  410  319 
6258  175  137  262  203 
685  159  207  -49  256  291 
10774  217  215  316  301 
3302  172  170  230 
198  180  292  278 
11865  209  276  104  133  314  408 
967  215  259  -43  107  126  323  385  -62 
3333  148  159  227  214 
708  141  185  229  2.')4
4766  175  181  263  253 
16382  195  151  294  219 
1644  151  120  105 
535  171  166  258  226 
5704  184  117  100  284  187 
4407  189  168  101  291  253 
1936  132  221  -89  216  314 
4775  213  195  311  280 
509  172  112  268  161  107 
Outlyingl  3282  122  103  225  150 
Other3  4236  211  211  222  222 
Total  238736  214  199  103  317  295  1. u.s. Department of Commerce, Bureau of the Census. Statistical abstract of the United States, 1990. 1 10th ed. Washington, DC: U.
Government Printing Offce, 1990: 20. Table 26,
. 2. U.S. Department of Commerce, Bureau of the Census. Estimates of the population of Puerto Rico and the outlying 
areas: 1980 to 1986.

Current Population Reports, Series P- , No. 1009. Washington, DC: U.S. Government Printing Office, July 1987.
3. U.S. Department of Commerce, Bureau of the Census. Statistical abstract of the United States, 1987. 107th ed. Washington, DC: U.
Government Printing Offce, 1987: 9. Table 4. Appendix 10: Part A and Part B contributions and disbursements per employee by state, 1985 ($) 
Employees! Part A  Part B  Total 
State (thousand) Contributed  Disbursed  Net Contributed  Disbursed  Net Contributed  Disbursed  Net 
1803  341  430  -89  186  169  526  598 
.AK  253  678  115  564  258  203  937  170  767 
1477  397  427  198  221  595  647 
r' l120591   364  440  190  216  553  656  102
418  217  251  663  669 
1720  391  262  129  188  117  579  380  200
1711  538  389  149  252  184  790  573  217
315  746  381  365  212  181  957  562  395
322  992  559  433  248  1241  823  418
5338  360  590  230  233  341  108  593  931  338
2865  379  312  184  155  563  467 
481  393  277  116  202  148  594  424  170
471  337  291  167  132  504  423 
5673  467  489  226  194  693  682 
2735  377  375  191  136  568  511 
1416  351  398  -47  207  170  558  569 
1244  383  414  209  178  592  592 
1695  297  368  186  130  482  499 
--E  1987  350  422  196  143  546  565
552  293  438  145  188  139  481  578 
2253  427  360  217  182  644  542  102
3061  469  432  225  224  694  656
4352  513  207  229  719  717
2234  453  346  106  193  155  645  501  144
1211  240  410  170  159  148  400  558  159
2472  414  555  141  205  187  619  742  123
405  303  279  181  148  484  427 
813  379  360  195  124  574  485 
509  335  344  191.  175  526  519 
537  400  307  197  117  597  425  172
3853  513  402  111  253  202  766  603  163 
343  316  181  141  524  457 
8308  634  423  211  242  260  876  683  193
3106  353  277  175  133  528  410  118
336  323  423  199  170  522  592 
5130  457  452  208  181  665  632 
1573  361  356  201  126  563  482 
1327  400  365  192  197  592  562
5519  450  592  143  224  285  -61  674  877  203
500  417  500  -83  207  624  744  120 
1563  316  338  169  118  485  456 
347  289  378  -89  179  141  468  519 
2245  371  385  188  152  558  537 
8053  396  308  202  138  598  446  152
730  339  163  176  166  107  506  270  236
277  330  321  168  116  498  437 
2872  365  232  134  199  140  565  372  193
2105  396  352  212  177  530 
765  334  558  224  214  235  548  793  246
2374  428  392  198  171  626  563 
253  346  225  121  193  539  324  214
Outlying2  837  477  160  317  404  131  272  880  292  589
Othe  2151  416  416  436  436
Total  118763  430  401  208  193  638  594  1. U.S. Department of Commerce, Bureau of the Census. Statistical abstract of the United States, 1987. 107th ed. Washington, DC: U.
Goernment Printing Offce, 1987: 377. Table 641.
1 2. U.
S. Department of Commerce, Bureau of the Census. Statistical abstract of the United States, 199. 1l0th ed. Washington, DC: U. 
Government Printing Offce, 1990: 820. Table 1420. 
Hiles G. Current employment report, March 1986. Tamuning, GU: Guam Department of Labor, Bureau of Labor Statistics
, 1986: 3. 
Release #86-0.
I. Bureau of Labor Statistics. U.S. Virgin Islands economic indicators. St. Croix, VI: WSVI- , Channel 8, 1988: 7. 
3. U.S. Department of Commerce, Bureau of the Census. Statistical abstract of the United States, 1990. llOth ed. Washington, DC: U. 
Government Printing Offce, 1990: 339. Table 552.  Appendix 11: Part A and Part B contributions and disbursements per gross state product ($ millon) by state
, 1985 (percent) 
Gross state Part A  Part B  Total 
State  productl Contributed  Disbursed  Net Contributed  Disbursed  Net Contributed  Disbursed  Net 
51919  1.8  1.49  0.31  059  1.83  -0. 
21237  0.31  1.2 
42895899   1.21  1.30  -0.  -0.  1.81  1.97  -0.
1.28  1.54  -0.  -0.  1.94  2.30  -0.36
49650  1.6  1.09  0.57  -0.  1.73  1.74  -0. 
56713  1.9  0.39  0.57  0.36  1.6  1.5
6496  1.42  1.03  0.39  0.49  1.51  0.57 
10966  1.09  1.05  0.52  1.61  1.4 
27185  1.8  0.51  0.31  1.47  0.49 
164340  1.7  1.92  -0.  1.1  -0.  1.93  1.0 
94121  1.5  0.56  1.71  1.42  0.29 
17994  1.05  0.31  0.54  0.39  1.59  1.3  0.45 
13027  1.22  1.05  1.82  1.53  0.30 
198138  1.34  1.40  -0.  0.55  1.98  1.95 
80262  1.29  1.28  1.93  1.74 
42100  1.8  1.34  -0.  1.88  1.91  -0. 
40364  1.8  1.28  -0.  0.55  1.82  1.83  -0. 
51234  1.22  -0.  1.60  1.65  -0. 
79719  1.05  -0.  0.49  0.36  1.36  1.41  -0. 
15896  1.02  1.52  -0.50  1.67  -0.34 
70580  1.36  1.5  0.58  1.73  0.32 
106148  1.5  1.25  1.89 
143719  155  1.48  -0. 
71183  1.42  1.09  0.33  0.49  1.57  0.45 
30819  1.61  -0.  0.58  1.57  -0. 
79220  1.29  1.73  -0.  0.58  1.93  2.32  -0.38 
11543  1.06  0.52  1.70  1.50 
25639  1.20  1.4  0.39  1.82  1.54 
17918  -0.  0.54  0.50  1.50  1.47 
16585  1.29  0.38  1.93  1.37  0.56 
142302  1.39  1.09  0.55  1.63  0.44 
23887  0.49  0.38  1.42  1.23 
336071  1.57  1.05  0.52  1.69  0.48 
93821  1.7  0.58  0.44  1.75  1.36  0.39 
10725  1.01  1.32  -0.  0.53  1.64  1.86  -0. 
167645  1.40  1.38  0.55  1.94
5082  1.2  1.0  0.39  1.4  1.49  0.25 
38922  1.37  1.24  -0.  1.92 
17299  1.43  1.89  -0.  -0.  -0. 
13961  1.49  1.9  -0.30  -0.  2.66  -0.43 
41832  1.8  1.26  -0.  1.81  1.70 
9297  1.08  1.41  -0.33  0.53  1.75  1.94  -0. 
67560  1.23  1.28  -0.  0.50  1.86  1.79 
307615  1.04  0.53  0.36  1.57  1.7  0.40 
23172  1.07  0.51  0.56  0.52  0.34  1.59 
7915  1.5  1.2  0.59  0.40  1.74  1.53 
95369  1.0  0.40  0.42  1.70  1.2  0.58 
71756  1.6  1.03  0.52  1.79  1.55  0.23 
23541  1.09  1.81  -0.  -0.  1.78  2.58 
72716  1.40  1.28  0.56  1.84  . 0. 
12777  0.45  0.38  1.07  0.42 
Outlying2 17534  1.51  1.93  1.30  1.9
Othe  31100
Total  4011980  1.27  1.9  0.57  1.89  1.76 1. U.S. Department of Commerce, Bureau of the Census. Statistical abstract of the United States, 1990. 110th ed. Washington, DC: U.
Government Printing Offce, 199: 433. 
2. U.S. Department of Commerce, Bureau of the Census. Statistical abstract of the United States, 1990. 110th ed. Washington, DC: U.
Government Printing Office, 1990: 820. Table 1420.
Hutchersn IT. Annual economic revew and statistical abstract, 1989. Tamuning, GU: Guam Department of Commerce, Economic
Research Center, 1989: 36. Table 12.
V.I. Bureau of Labor Statistics. U.S. Virgin Islands economic indicators. St. Croix, VI: WSVI- , Channel 8, 1988: 2. 
3. U.S. Department of Commerce, Bureau of the Census. Statistical abstract of the United States, 199. 110th ed. Washington, DC: U. 
Goernment Printing Offce, 1990: 426. Table 691.  Appendix 12: Population, employees, and gross state product per beneficiary by state, 1985
State  Per beneficiary 
Population Employees  Gross state product ($ thousand) 
3.5  1001 
31.8  15.5  12972 
8.0  1231 
836 
4.5  1739 
11.0  192 
7.5  1518 
8.4  1469 
8.5  4.4  3726 
836 
4.5  1478 
10.  1831 
8.8 1141(cid:1)
140(cid:1)
1180(cid:1)
983(cid:1)
1203 
3.5  1064 
4.4  1759 
3.3  959 
9.5  1524 
7.3  1332 
1297 
1323 
923(cid:1)
1102(cid:1)
1121(cid:1)
1152(cid:1)
5.3  1857(cid:1)
4.4  1370(cid:1)
7.5  1414(cid:1)
10. 4.5  1648(cid:1)
7.5  3.5  1423(cid:1)
8.3  1241(cid:1)
7.5  1180(cid:1)
1221(cid:1)
1245(cid:1)
1070(cid:1)
972(cid:1)
3.5  964(cid:1)
1134(cid:1)
3.4  918(cid:1)
1099(cid:1)
10.5  1971(cid:1)
12.  1770(cid:1)
1167(cid:1)
9.3  1555(cid:1)
8.5  1382 
831 
7.3  1114 
11.7  2935 
Outlying  10.  579 
Other  18.4  1352 
Total  1328  Appendix 13: Payroll tax and Part A general revenue contribution per beneficiary, population, employees, and gross state product by state
1985
State Per beneficia  Per  ulation  Per em  Per  ross state  roduct  ercent
OASDHI  General  OASDHI  General  OASDHI  General  OASDHI  General
revenue  revenue  revenue  revenue
1078  107  139  310  1.08 
9593  888  301  621 
1355  129  169  362  1.0 
981  149  334  1.7 
1832  186  199  405  1.05 
2072  213  189  354  1.08 
1968  192  264  490  1.30 
2982  165  356  707 
4168  212  944  1.2 
874  104  151  322  1.05 
1556  149  166  346  1.05 
1735  187  162  354 
1271  118  144  308  1.1 
1714  169  209  425  1.22 
1381  135  171  344  1.7 
1045  116  156  316  1.06 
1282  138  176  346  1.07 
935  109  121  266 
1377  157  139  314 
873  102  124  262 
1875  202  198  385  1.23 
1642  158  225  428  1.23 
186  146  228  476  1.44 
1736  143  223  418  1.31 
780  100  215 
1303  121  186  379  1.8 
1070  123  134  272 
1262  123  175  346  1.0 
1575  192  162  298 
1614  160  196  364  1.8 
1781  183  237  465  1.26 
1383  145  138  310 
2078  155  276.  590  1.46 
1325  124  160  322  1.07 
1066  128  142  289 
1569  138  200  420  1.28 
1255  138  155  326  1.01 
1341  120  182  368  1.25 
1276  119  191  411  1.31 
1315  123  197  381  1.36 
1215  124  134  287  1.07 
889  100  127  259 
1237  116  160  339  1.3 
1842  200  175  357 
1719  173  137  308 
1231  117  156  301  1.05 
1537  174  165  328 
1450  157  171  358  1.05 
812  119  300 
1433  124  196  394  1.29 
1792  218  153  308 
Outlying  1100  217  102  398  1.90  0.37 
bther  3894  211  416 
Total  1545  147  195  393  1.6