CBO: Medicare spending expected to reach $1.2T in the next decade

Medicare enrollment form and pen
Annual Medicare growth is expected to reach 7% starting next year, according to the CBO. (Getty/zimmytws)

Starting next year, annual Medicare spending is expected to grow by an average of 7% over the next decade, exceeding $1.2 trillion by 2028.

That’s according to the Congressional Budget Office, which released an updated report on federal expenditures over the next 10 years. Healthcare costs overall are projected to grow faster than the economy, and spending per enrollee in federal health programs is expected to grow more rapidly in the coming years.

Medicare costs account for about half of the outlays for major healthcare programs in 2018, but that proportion is expected to grow to two-thirds by 2028, according to the report (PDF).


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That 7% annual growth will be driven primarily by higher per-beneficiary medical costs, according to the CBO, along with increasing enrollment.

RELATED: Increased Medicare enrollment a major driver behind healthcare spending trends over next decade

A recent analysis by the Centers for Medicare & Medicaid Services (CMS) highlighted enrollment as a major driver of the program’s growth. That same report suggested healthcare spending increases would overtake U.S. gross domestic product growth over the next eight years.

Medicaid, which is estimated to see its lowest spending growth since 2012 this year, is projected to grow 5.5% each year, also due to increasing enrollment, according to the CBO.

Health insurance subsidies are expected to increase 21% in 2018 thanks to a big jump in ACA premiums. But that growth is expected to slow to just 5% each year.

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