Final answer:
Medicare spending in the U.S. was $692 billion in 2016 and is projected to grow, with healthcare spending expected to be 8% of GDP by 2030 and 15% by 2080. The rising costs are driven by an aging population and increasing medical prices.
Step-by-step explanation:
Medicare is a significant component of the United States health care system and has been since it was established in 1965. According to the National Health Expenditures released in January 2011, healthcare represents a larger share of income as people age, notably for those on Medicare. In 2016, Medicare spending reached $692 billion. The portion of government spending on Medicare is expected to rise from 3 percent of gross domestic product (GDP) in 2009 to 8 percent of GDP by 2030, and further to 15 percent in 2080, according to the U.S. Department of Health and Human Services. This substantial increase is attributed in part to the aging Baby Boom cohort, which will see the number of persons enrolled in Medicare projected to increase from 47 million in 2010 to 80 million by 2030.
Long-term projections from the Congressional Budget Office indicate that Medicare and Social Security spending combined will rise from 8.3% of GDP in 2009 to about 13% by 2035 and about 20% in 2080. It is essential to note that if such a rise in spending occurs without a corresponding rise in tax collections, this will necessitate a mix of significant changes in tax policy, spending cuts, Medicare eligibility adjustments, or the federal government will need to run extremely large budget deficits.