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Medicare Spending Projected to Grow to 5.9 Percent of GDP by 2038

April 23, 2019

McDermott+Consulting

On April 22, 2019, the Medicare Board of Trustees released their annual report on the state of the Medicare Trust Fund. The Trustees project that Medicare costs will grow from approximately 3.7 percent of GDP in 2018 to 5.9 percent of GDP by 2038, and will increase gradually thereafter to about 6.5 percent of GDP by 2093.

The report finds that the Medicare Hospital Insurance Trust Fund, which funds Medicare Part A, will only be able to pay full benefits for Medicare beneficiaries until 2026, the same year projected in last year’s Report. The Supplementary Medical Insurance (SMI) Trust Fund, which funds Medicare Part B and D, is expected to be adequately financed in all years, but the aging population and rising healthcare costs are projected to grow SMI costs from 2.1 percent of GDP in 2018 to approximately 3.7 percent of GDP in 2038.

The press release is available here.

The 2019 report is available here.

 


For more information visit the McDermottPlus Payment Innovation Resource Center or contact Sheila Madhani at 202-204-1459/smadhani@mcdermottplus.com.

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