Final answer:
Healthcare expenditures are rising mainly due to the increasing prevalence of chronic diseases, advancements in medical technology, an aging population, and administrative costs in the healthcare sector. Medicare spending as a percentage of GDP is also projected to increase substantially by 2080.
Step-by-step explanation:
The question at hand is why healthcare expenditures are rising as a fraction of GDP in the United States. Among the reasons provided, all are correct explanations for this trend:
- Increasing prevalence of chronic diseases: As more people live with long-term health conditions, ongoing treatment and management of these diseases drive up healthcare costs.
- Advancements in medical technology: Innovations in medical care, while often leading to better outcomes, come with higher costs for equipment, research, and treatments.
- Ageing population: With the Baby Boom generation aging, there's a growing percentage of the population requiring more medical care, which increases spending on healthcare programs like Medicare.
- Administrative costs in healthcare sector: The complexities of healthcare billing and administration contribute significantly to overall healthcare spending.
Additionally, according to the U.S. Department of Health and Human Services, healthcare spending is expected to grow annually, with a projection that Medicare spending as a percentage of GDP will significantly increase by 2080.