Medicare spending is expected to be $1,200 lower per beneficiary in

Report
Medicare spending is 14% of the federal budget
Total Federal Spending in 2013: $3.5 Trillion
Social Security
23%
Defense
18%
14%
17%
Nondefense
discretionary
8%
14%
Other
MEDICARE
6%
Medicaid
Net interest
NOTE: All amounts are for federal fiscal year 2013. 1Consists of Medicare spending minus income from premiums and other offsetting receipts.
2Other category includes spending on other mandatory outlays minus income from offsetting receipts.
SOURCE: Congressional Budget Office, Updated Budget Projections: 2014 to 2024 (April 2014).
Nearly one-fourth of Medicare spending is for hospital
inpatient services
Total Medicare Benefit Payments in 2013: $583 billion
Other
services
Hospital
outpatient
Post-acute
care
14%
24%
6%
Hospital
inpatient
8%
Outpatient
prescription
drugs
11%
25%
Medicare
Advantage
12%
Physician payments
NOTE: Other services consists of Medicare benefit spending on hospice, durable medical equipment, Part B drugs, outpatient dialysis,
ambulance, lab services, and other Part B services; also includes the effect of sequestration on spending for Medicare benefits and amounts
paid to providers and recovered.
SOURCE: Congressional Budget Office, 2014 Medicare Baseline (April 2014).
Medicare is on track to spend ~$1,200 less per person in
2014 than was projected in 2010, and ~$2,400 less in 2019
$14,913
$15,000
FOR 2019
-$2,436
$14,000
$13,000
$12,376
$12,000
$12,478
FOR 2014
-$1,209
$11,167
$11,000
$10,000
2014
2019
SOURCE: Kaiser Family Foundation analysis of mandatory Medicare outlays and Medicare enrollment data from CBO Medicare baseline
projections, 2010-2014; 2014 estimates based on August 2014 baseline.
Medicare spending per person is expected to grow more
slowly than private health insurance spending from 2013 to
2022
8%
7%
6%
5%
4.7%
4%
3%
3.6%
2%
1%
0%
Medicare
Private health insurance
SOURCE: Kaiser Family Foundation analysis of Medicare spending and enrollment data from 2014 Annual Reports of the Boards of Trustees of
the Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds (July 2014), adjusted for the cost of a 0% update to the
Sustainable Growth Rate for physician payments per Congressional Budget Office, Medicare's Payment to Physicians: the Budgetary Impact of
Alternative Policies Relative to CBO's May 2013 Baseline updated for Final Rule (December 2013); and analysis of private health insurance
spending and enrollment data from Centers for Medicare & Medicaid Services, Office of the Actuary, National Health Statistics Group, National
Health Expenditure Projections 2013-2023 (September 2014)
Total Medicare spending is projected to grow faster in the
second half of the coming 10 years than the first half
8%
7%
6.9%
6%
5%
4%
3%
3.9%
2%
1%
0%
2014-2018
2019-2023
SOURCE: Kaiser Family Foundation analysis of Medicare mandatory outlays from Congressional Budget Office, An Update to the Budget and
Economic Outlook: 2014 to 2024 (August 2014).
Medicare spending is projected to grow as a share of the
economy
6%
5%
4.4%
3.9%
4%
3%
4.8%
2.9%
3.1%
3.4%
2%
1%
0%
2015
2020
2025
2030
2035
2040
NOTE: Estimates are net Medicare spending as percentages of gross domestic product (GDP), based on the extended alternative fiscal scenario,
under which Medicare’s physician payment rates would be maintained at current levels, rather than reduced.
SOURCE: Congressional Budget Office, The 2014 Long-Term Budget Outlook (July 2014).
The outlook for the Medicare hospital trust fund has
improved, but it is projected to have insufficient funds to
pay all hospital bills beginning in 2030
2030
2029
2024
2019
2008
2010
2012
2014
Year of Projection
SOURCE: Intermediate projections from 2005-2014 Annual Reports of the Boards of Trustees of the Federal Hospital Insurance and
Federal Supplementary Medical Insurance Trust Funds.

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