As required by the Social Security Act, a Medicare Board of Trustees oversees the financial operations of the two Medicare trust funds: the Hospital Insurance (HI) Trust Fund and the Supplementary Medical Insurance (SMI) Trust Fund. The HI Trust Fund covers Medicare Part A services, including hospital, home health, skilled nursing facility, and hospice care; the SMI Trust Fund covers Medicare Parts B and D, including physician and outpatient hospital services and outpatient prescription drugs. The two trust funds are statutorily separate, with all HI and SMI benefit expenditures paid out of their respective trust funds. The Medicare trustees are required to report annually to Congress on the financial and actuarial status of the funds. The primary source of financing for the HI Trust Fund is the payroll tax on covered earnings of current workers. Employers and employees each pay 1.45% of wages, and unlike the Social Security tax, there is no annual maximum limit on taxable earnings. Workers with annual wages over $200,000 for single tax filers or $250,000 for joint filers pay an additional 0.9%. Other sources of revenue for the HI Trust Fund include interest paid on the U.S. Treasury securities held in the HI Trust Fund, a portion of the federal income taxes that individuals pay on their Social Security benefits, and premiums paid by individuals who would otherwise not qualify for Medicare Part A. The SMI Trust Fund has different revenue sources. There are no payroll taxes collected for this fund, and enrollment in Medicare Parts B and D is voluntary. Individuals enrolled in Parts B and D must pay premiums, which cover about 25% of program costs. The other 75% of revenues for the SMI Trust Fund primarily comes from general revenue transfers. Other sources of revenue include interest paid on the U.S. Treasury securities held in the fund and Part D state transfers for Medicare beneficiaries who are also eligible for Medicaid (dual-eligibles). The 2018 report of the Medicare Board of Trustees estimates that by 2026, HI revenues and assets will no longer be sufficient to fully cover Part A costs and the fund will become insolvent. Because of the way it is financed, the SMI fund cannot face insolvency; however, the Medicare trustees project that SMI expenditures will continue to grow rapidly and thus place increasing strains on the federal budget. Because of concerns over the potential for growth in general revenue spending for Medicare over time, the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA; P.L. 108-173 ) created a Medicare trigger that requires certain actions to be taken should general revenue funding be expected to exceed a certain proportion of total Medicare outlays within a certain number of years. Specifically, Section 801 of the MMA requires the Medicare trustees, beginning with their 2005 report, to examine and make a determination each year of whether general revenue funding is expected to exceed 45% of Medicare outlays for the current fiscal year or any of the following six fiscal years. An affirmative determination in two consecutive annual reports is considered to be a Medicare funding warning in the year in which the second report is made. If such a warning is issued, the MMA (Sections 802-804) specifies certain requirements and procedures for the President and Congress to follow related to the introduction and consideration of legislation designed to respond to the warning. There is, however, no requirement that legislation must be enacted and no automatic mechanism in place to sequester money. It is also important to note that either chamber may alter these procedures should a numerical majority choose to do so. Section 801 of the MMA defines the key measures and terms used in determining a Medicare funding warning. Excess general revenue Medicare funding occurs when general revenue Medicare funding divided by total Medicare outlays exceeds 45%. General revenue Medicare funding is defined as total Medicare outlays minus dedicated financing sources . Total Medicare outlays include total outlays from the HI and SMI Trust Funds. The law specifies that payments made to plans under Part C (Medicare Advantage, MA) for rebates, and administrative expenditures for carrying out Medicare, are to be included in the total. Fraud and abuse collections that are applied or deposited into a Medicare trust fund are to be deducted from the total. Dedicated revenue sources include the following: (1) HI payroll taxes; (2) amounts transferred to the Medicare trust funds from the Railroad Retirement pension fund; (3) income from taxation of certain Social Security benefits which is credited to the HI Trust Fund; (4) state transfers for the state share of amounts paid to the federal government for dual-eligible beneficiaries enrolled in Part D; (5) Medicare premiums paid under Parts A (HI), B (SMI) and D (SMI) of Medicare—including any amounts paid as a result of late enrollment penalties (without taking into account reductions in premiums as a result of rebates received by beneficiaries enrolled in MA plans); and (6) any gifts received by the trust funds. Interest earned on the trust fund is excluded from dedicated sources. A Medicare funding warning is triggered when two consecutive Medicare trustees' reports contain projections that general revenue Medicare funding will exceed 45% of total Medicare outlays at some point during the next seven years (this includes the current and six subsequent fiscal years). The Medicare trustees first made a determination of excess general revenue Medicare funding in their 2006 report and did so in each report through 2013. As two consecutive such determinations trigger a funding warning, funding warnings were issued each year from 2007 through 2013. The 2013 report was the eighth consecutive time that the threshold was estimated to be exceeded within the first seven years of the projection, and it was the seventh time that a Medicare funding warning was triggered. However, the Medicare Trustees Reports issued in 2014, 2015, and 2016, projected that Medicare general revenue funding would not exceed 45% of total Medicare outlays within the next seven years. Therefore, the Medicare trustees did not issue determinations of excess general revenues and funding warnings were not triggered in those years. No response was required of the President or Congress in 2015, 2016, 2017, or 2018. Specifically, in their 2014 and 2015 reports, the Medicare trustees projected that the expected higher tax income and lower outlays due to provisions in the Patient Protection and Affordable Care Act (ACA; P.L. 111-148 ) and other legislation would result in general revenue funding remaining below the 45% threshold over the next seven years. For similar reasons, as well as a recent slowing in Medicare spending, the Medicare trustees estimated in their 2016 report that general revenue funding would remain below the 45% threshold through FY2022. In their 2017 report, however, the Medicare trustees projected that general revenues would exceed the 45% threshold in FY2023, within the seven-year projection window. Therefore, the trustees issued a determination of excess general revenue Medicare funding. Similarly, in their 2018 report, the trustees estimated that general revenues would exceed the 45% threshold in FY2022 (at the end of CY2021), also within the seven-year projection window, and thus issued a determination of excess general revenue Medicare funding (see Figure 1 ). Because such a determination was made in two consecutive years, a funding warning has been triggered and a legislative response by the President will be required subsequent to the release of his FY2020 budget (in 2019). The Medicare trustees project that by the end of CY2021, the ratio of dedicated funding to outlays will exceed 45%, grow to almost 54% by 2042, and decline to about 51% by the end of the 75-year projection period, in 2092. In years in which the Medicare trustees issue a Medicare funding warning, the President is required to submit to Congress proposed legislation that "respond[s] to such warning." Although the precise contents of the proposal remain within the President's discretion, Section 802 of the MMA requires that the proposal be submitted within 15 days of submitting a budget for the succeeding year. The requirement that the President submit proposed legislation in response to a funding warning does not apply, however, if, "during the year in which the warning is made," Congress enacts legislation to eliminate excess general revenue Medicare funding for the seven-fiscal year reporting period, as certified by the Medicare trustees within 30 days of the legislation's enactment. The executive branch has generally taken the position that, under the Constitution's Recommendation Clause, Congress cannot compel the President, or executive branch officials, to submit legislative proposals directly to Congress. These objections have been registered in numerous presidential signing statements and Department of Justice, Office of Legal Counsel opinions, and have repeatedly been asserted in litigation. For example, upon signing the MMA on December 8, 2003, President George W. Bush issued a signing statement registering his constitutional objections to Section 802's requirement that the President submit proposed legislation to Congress in response to a Medicare funding warning. Specifically, President Bush noted that his Administration would construe Section 802 "in a manner consistent with the President's constitutional authority to supervise the unitary executive branch and to recommend for the consideration of the Congress such measures as the President judges necessary and expedient." Similarly, the Obama Administration considered "the requirement to submit legislation in response to the Medicare funding warning to be advisory and not binding, in accordance with the Recommendations Clause of the Constitution." Notwithstanding his objections to Section 802, President Bush submitted legislation in 2008 responding to the Medicare trustees' 2007 funding warning. No action was taken on the President's proposal. Although the Medicare trustees issued warnings each year from 2007 through 2013, no additional legislative proposals have been submitted to Congress pursuant to Section 802. Since the Medicare trustees did not issue funding warnings in their 2014, 2015, 2016, or 2017 reports, the President was not required to submit related legislation subsequent to the submission of his FY2015 through FY2019 budgets. However, as the Medicare trustees issued a funding warning in their 2018 report, the MMA provides that the President will be required to submit a responsive legislative proposal after the release of his FY2020 budget.