Medicare spending hits $702B in 2017, will top $1T in 2026
The Kaiser Family Foundation released an issue brief June 22 that projected total Medicare spending to top $1 trillion by 2026, up from a total of $702 billion last year, according to Congressional Budget Office and CMS data.
“Medicare, which serves nearly 60 million seniors and people with disabilities, accounted for 20 percent of national health spending in 2016, 29 percent of spending on retail sales of prescription drugs, 25 percent of spending on hospital care and 23 percent of spending on physician services,” according to the release.
The $702 billion figure for 2017 was a stark increase from 2007, when total spending hit $425. While overall spending for Medicare Parts A, B and D increased, Part A’s share of the total dropped from 47 percent in 2007 to 42 percent last year.
Other key findings include:
- Medicare accounted for 15 percent of the federal budget in 2017, the same proportion as the defense budget.
- Between 2010 and 2017, Medicare per capita spending grew more slowly (1.5 percent) than private insurance spending (3.8 percent).
- Projected net spending is expected to hit $1.04 trillion in 2026 and $1.26 trillion in 2028.
- Currently 3.1 percent of GDP, Medicare spending is projected to his 4.2 percent of GDP in 2028.
“Although Medicare spending is on a slower upward trajectory now than in past decades, total and per capita annual growth rates are trending higher than their historically low levels of the past few years,” the report states. “The aging of the population, growth in Medicare enrollment due to the baby boom generating reaching the age of eligibility and increases in per capita health care costs are leading to growth in overall Medicare spending. At the same time, recent legislative changes, including repeal of the ACA’s individual mandate and repealing [Independent Payment Advisory Board], have worsened the short-term outlook for the Medicare Part A trust fund and have led to projections of higher Medicare spending in the future.”
Nicholas joined TriMed in 2016 as the managing editor of the Chicago office. After receiving his master’s from Roosevelt University, he worked in various writing/editing roles for magazines ranging in topic from billiards to metallurgy. Currently on Chicago’s north side, Nicholas keeps busy by running, reading and talking to his two cats.