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The Facts on Medicare Spending and Financing

  • Medicare spending was 15 percent of total federal spending in 2017, and is projected to rise to 18 percent by 2028.
  • Based on the latest projections in the 2018 Medicare Trustees report, the Medicare Hospital Insurance (Part A) trust fund is projected to be depleted in 2026, three years earlier than the 2017 projection.
  • In 2017, Medicare benefit payments totaled $702 billion, up from $425 billion in 2007.
  • As a share of total Medicare benefit spending, payments to Medicare Advantage plans for Part A and Part B benefits nearly doubled between 2007 and 2017, from 18 percent ($78 billion) to 30 percent ($210 billion), as enrollment in Medicare Advantage plans increased over these years.
  • Average annual growth in Medicare per capita spending was 1.5 percent between 2010 and 2017, down from 7.3 percent between 2000 and 2010, due in part to the Affordable Care Act’s reductions in payments to providers and plans, and to an influx of younger beneficiaries from the baby boom generation aging on to Medicare, who have lower per capita health care costs.
  • Medicare per capita spending is projected to grow at an average annual rate of 4.6 percent over the next 10 years, due to growing Medicare enrollment, increased use of services and intensity of care, and rising health care prices.

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