Financial Outlook

In 2017, The Henry J Kaiser Family Foundation issued a news brief * listing these facts about Medicare’s financial outlook:

  1. Medicare isn’t “going broke” even though it does face financial challenges.
  2. The aging of the U.S. population, along with higher health care costs, are contributing to the growth in Medicare spending over time.
  3. The ACA helped to reduce Medicare spending growth in the years following its enactment.
  4. Repealing the ACA, including all Medicare provisions, would increase Medicare spending.
  5. Medicare spending was 15 percent of the federal budget in 2016.
  6. Medicare spending is projected to increase gradually as a share of the federal budget and the nation’s economy over the next 10 years.
  7. Medicare spending is projected to increase at a faster rate in the coming years than in the five years following enactment of the ACA.
  8. Spending on Part D prescription drug coverage is expected to grow faster than spending on other Medicare-covered benefits over the next 10 years.
  9. Medicare spending is projected to increase as a share of the economy over the long run, but the ACA helped to moderate the long-range projections.
  10. Medicare benefits are funded mainly by a combination of general revenues, payroll taxes, and premiums paid by beneficiaries.

* Henry J Kaiser Family Foundation; 10 Essential Facts About Medicare’s Financial Outlook; Juliette Cubanski and Tricia Neuman (2017)