Medicare
📊 Current vs Optimal
📈 Outcome Metrics
↓ RECOMMENDATION: DECREASE
Spending on Medicare should be decreased by $0 (+0.0%) to reach the optimal allocation of $874.0B.
💰 Budget Context
🔬 How Is Optimal Calculated?
The Optimal Budget Generator (OBG) uses a diminishing-returns framework to allocate spending across categories. Each budget category is modeled with a concave utility function — the first dollar spent on a category produces more welfare than the billionth dollar.
Budget Impact Score (BIS)
Each category's BIS is computed from outcome metrics weighted by their importance to overall welfare. The BIS captures how effectively each marginal dollar translates into measurable improvements in health, education, security, and quality of life.
Diminishing Returns Model
Spending follows a logarithmic utility curve: U(x) = α · ln(x + 1) where α is calibrated from the category's marginal return coefficient. The optimal allocation equalizes the marginal utility per dollar across all categories — the point where reallocating $1 from any category to another would not improve total welfare.
Marginal Return (0.30% for Medicare)
The marginal return of 0.30% means each additional dollar currently spent on Medicare produces 0.30 cents of welfare value. Categories with higher marginal returns are underfunded relative to their potential; those with lower returns are overfunded.
The total budget constraint is maintained at $6.71T. The optimizer reallocates within this envelope to maximize aggregate welfare measured by the BIS-weighted outcome metrics across all 23 categories.
See the Optimal Budget Generator paper for full methodology.
Generated 2/7/2026 · Optomitron OBG