The Medicare Office of the Actuary has released its annual update to estimates and projections for health spending, extending through 2034. Health spending is a crisis in this country, largely because of excessive hospital and drug costs and government programs that are riven with fraud and abuse. In 2024 it is estimated that we spent $5.3 trillion on health care, which increased to $5.7 trillion in 2025, or by 7.3%, and this will rise to $9.3 trillion by 2034, according to the actuaries. Health spending continues to account for an ever-rising proportion of our total economy. GDP growth was around 5% for 2025 and in each of the recent years health spending has grown faster than the economy. I would also note from a big picture perspective that utilization is playing more of a role in health spending increases, and price inflation is less of a factor, but the actuaries are anticipating that over the next ten years, health care prices will rise faster than general inflation.
On a per person basis, national health spending was $16,486 in 2025, is projected to be $17,496 in 2026 and estimated at $25, 513 in 2034. The subcategory of total health spending that goes to actual personal health care was $14,981 per person in 2025, $16,386 estimated for 2026 and $21,864 in 2034. The gap representatives public health spending and some administrative costs.
Who pays all these costs? Private health insurers paid $1.78 trillion in 2025 or $8,200 per insured person, will pay $1.89 trillion in 2026 or $8860 per person, and are estimated to pay $2.07 trillion in 2034 or $12,600 per insured. For Medicare the comparable numbers are $1.2 trillion in 2025 and $17,750 per person; $1.31 trillion in 2026 and $18,980 per person; and $2.35 trillion in 2034 or $30,129 per beneficiary. Medicaid comes in at $1.01 trillion or $12,442 per person in 2025, $1.06 trillion or $13,082 per person in 2026 and $1.52 trillion or $18554 per person in 2034.
Private health insurance spending is projected to rise an average annually of 5% from 2025 to 2034 or 5.1% per person, Medicare spending will rise 7.7% annually, but 6% on a per person basis, while Medicaid rises at 5% or 5.3% per person. In 2026 private insurance is estimate to cover 213 million people and remain at that level through 2034. Medicare currently covers 69 million people and will grow to 72.5 million in 2034, while Medicaid stays steady at 81 million from 2026 to 2034. How can we have 81 million people on Medicaid? (HA Article)
More to come tomorrow.
