How much does Medicare cost the federal government?
Updated annually
About $1.1 trillion in 2024. Spending on Medicare, a federally run health insurance program primarily for people 65 and older, came out to $17,786 per beneficiary or $3,299 for every person in the US.

$1.1T

spent on Medicare (2024)

12.9%

Medicare share of gross federal spending (FY 2024)

Adjusted for inflation, spending on Medicare increased from $812.7 billion in 2014 to $1.1 trillion in 2024, an increase of 38.1%. For comparison, the 65 and older population grew by 32.5% during that decade.

In 2024, the federal government spent $1.1 trillion on Medicare.

Medicare spending, inflation-adjusted

Medicare ranked as the second-largest federal program in FY 2024. accounting for 12.9% or about one of every eight dollars spent. Social Security, which is also aimed at serving older Americans, accounted for 18.5% of all spending.

In FY 2024, Medicare accounted for 12.9% of federal government spending.

Medicare outlays as a percentage of all federal outlays

Medicare is composed of various parts that provide different aspects of health insurance coverage:


  • Part A, also known as Hospital Insurance, covers hospital care and other inpatient care. Part A accounted for $422 billion or 37.8% of Medicare spending in 2024.
  • Part B, also known as Medical Insurance, covers outpatient care and doctor visits. Part B accounted for $553 billion or 49.3% of Medicare spending in 2024.
  • Part D is prescription drug coverage under Medicare. It accounted for $146 billion or 13% of Medicare spending in 2024.


Spending on the privately-run but federally-funded Medicare Part C, also known as Medicare Advantage, is not counted separately from Parts A, B and D. Part A, B and D spending includes any spending on Part C.Enter some text...

In 2024, Part B accounted for the largest share of Medicare spending.

Medicare spending (all parts), inflation-adjusted

In 2006, the first year of Medicare Part D, which provides prescription drug coverage, overall Medicare costs were $15,838 per beneficiary when adjusted for inflation. Cost per beneficiary in 2024 was $17,786 or 12.3% higher than in 2006.

Medicare officials currently project the Hospital Insurance trust fund to deplete by 2033.

End-of-year trust fund balance, historical and projected, not adjusted for inflation

Medicare is a mandatory program, meaning the federal government must provide benefits if someone qualifies for the program. Medicare funds come from two federal trust funds:

  • The Hospital Insurance (HI) trust fund supports Part A spending. The HI trust fund is primarily funded through payroll taxes specific to its funding.
  • The Supplementary Medical Insurance (SMI) trust fund supports Part B and Part D. It is primarily covered by general federal accounts

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Every year, the Boards of Trustees for Medicare release a report projecting the future size of the trust funds basing it on a series of factors including expected enrollment and payroll contributions. In its latest report, the trustees project the HI trust fund to deplete by 2033.

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Methodology

USAFacts standardizes data, in areas such as time and demographics, to make it easier to understand and compare.

Page sources

USAFacts endeavors to share the most up-to-date information available. We sourced the data on this page directly from government agencies; however, the intervals at which agencies publish updated data vary.