The General Accounting Office reviewed the effects of major legislative changes on Medicare and Medicaid program costs and the out-of-pocket costs to the programs' beneficiaries. Of 30 laws that affected Medicare and Medicaid enacted by Congress during the period 1980 through 1986, 5 were estimated to have the greatest effects on the costs of the two programs. Medicare cost growth trends were compared before and after the legislation for inpatient hospital care under Medicare part A and part B services. The results suggest that the five major laws passed during 1980 through 1986 contributed to a slowdown in Medicare cost growth during fiscal years 1981 through 1985 as compared with 1970 through 1980 data. Fiscal year 1982 Medicaid costs increased about 8 percent over 1981, a decline from the average annual cost growth rate of about 15 percent from 1973 through 1981. Some legislation contributed to the trend among states to increase Medicaid costs by expanding program eligibility and services. From 1980 through 1985, Medicare beneficiary average out-of-pocket costs increased about 49 percent for part A services and about 31 percent for part B services. Much of this increase could be attributed to legislation. Although the change in Medicaid recipient out-of-pocket costs could not be measured, it was found that many states expanded their cost-sharing requirements since certain legislative enactment. (NB)