How much does Medicare cost the federal government?

Refreshed annually
The federal government spent about $1.21 trillion on Medicare in 2025. Spending on Medicare, a federally run health insurance program primarily for people 65 and older, came out to $18,900 per beneficiary or $3,500 for every person in the US.
In fiscal year (FY) 2025, Medicare accounted for 14.1% of all federal spending.

$1.21T

spent on Medicare (2025)

14.1%

Medicare share of gross federal spending (FY 2025)
Adjusted for inflation, spending on Medicare increased from $879.7 billion in 2015 to $1.2 trillion in 2025, an increase of 37.6%. For comparison, the 65 and older population grew by 35.6% during that decade.

In 2025, the federal government spent $1.21 trillion on Medicare.

Medicare spending, inflation-adjusted

Medicare ranked as the second-largest federal program in FY 2025, accounting for 14.1% or about one of every seven dollars spent. Social Security, which is also aimed at serving older Americans, accounted for 19.3% of all spending.

In FY 2025, Medicare accounted for 14.1% of federal government spending.

Medicare outlays as a percentage of all federal outlays

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What are the different parts of Medicare and how much do they cost the federal government?

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 $444.2 billion or 36.7% of Medicare spending in 2025.
  • Part B, also known as Medical Insurance, covers outpatient care and doctor visits. Part B accounted for $584.3 billion or 48.3% of Medicare spending in 2025.
  • Part D is prescription drug coverage under Medicare. It accounted for $181.5 billion or 15% of Medicare spending in 2025.
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.

In 2025, 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 $16,300 per beneficiary when adjusted for inflation. Cost per beneficiary in 2025 was $18,900 or 16.2% higher than in 2006.

In 2025, Medicare cost the federal government $18,900 per beneficiary.

Medicare spending by federal government per beneficiary, inflation-adjusted

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.
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.

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

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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.