CBO Projects Medicare Spending at $1,038 Billion in 2020

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Congressional Budget Office

Issue Areas: 

Cost, Economic Impacts

Resource Type: 

Congressional Actions and Reports

CBO Jan 2010.pdf

According to CBO, gross spending on Medicare is expected to total $528 billion in 2010, $735 billion in 2015, and $1,038 billion in 2020.  The CBO also expects Medicare spending to rise (as a percentage of gross domestic product (GDP)) from 3.5 percent in 2009 to 4.6 percent in 2020.

Under current law, CBO also reports that Medicare and Medicaid spending (combined) is expected to grow faster than the economy, reaching 6.6 percent of GDP by 2020 and potentially reaching 10 percent by 2035.  In fact, the CBO states the following:

    “The single greatest threat to budget stability is the growth of federal spending on health care – pushed up both by increases in the number of beneficiaries of Medicare and Medicaid (because of an aging population) and by growth in spending per beneficiary that outstrips growth in per capita GDP.  For the nation’s fiscal situation to be sustainable in future decades, growth in such spending will have to be reduced relative to its historical trend and to CBO’s projected path.” 

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