PROJECTED MEDICARE OUTLAYS (percentage of GDP)
2007 2005 2006 2004 2005 2003 2004 2002 2003 2001
Year Budget TR^ Budget TR^ Budget TR^ Budget TR^ Budget TR^ Year
---- ------ ----- ------ ----- ------ ----- ------ ----- ------ ----- ------
1995* 1.85~ 2.45 2.10 2.45 2.45 2.45 1995
2000* 2.00 2.29 2.25~ 2.29 2.00 2.28 2.00 2.26 2.00 2.24 2000
2005* 2.40~ 2.69 2.40 2.76 2.45~ 2.54 2.30~ 2.38 2.10 2.41 2005
2010 2.80 3.50 2.85~ 3.66 2.90 2.69 2.60 2.54 2.30 2.57 2010
2015 3.25~ 4.12 3.30 4.24 3.40~ 3.04 3.00~ 2.59 2.60~ 2.89 2015
2020 3.70 4.96 3.95~ 5.08 3.90 3.53 3.40 2.86 2.90 3.34 2020
2025 4.35~ 5.90 4.60 6.04 4.90~ 4.13 4.00~ 3.33 3.40~ 3.90 2025
2030 5.00 6.77 5.30~ 6.95 5.90 4.75 4.60 3.89 3.90 4.51 2030
2035 5.55~ 7.52 6.00 7.75 6.65~ 5.30 5.05~ 4.48 4.35~ 5.03 2035
2040 6.10 8.14 6.50~ 8.41 7.40 5.74 5.50 5.00 4.80 5.41 2040
2045 6.55~ 8.70 7.00 9.00 7.95~ 6.10 5.88~ 5.38 5.15~ 5.72 2045
2050 7.00~ 9.25 7.45~ 9.56 8.50~ 6.45 6.25 5.69 5.50 6.01 2050
2055 7.45~ 9.84 7.90 10.16 9.05~ 6.87 6.63~ 5.97 5.94~ 6.36 2055
2060 7.90 10.55 8.50~ 10.89 9.60 7.37 7.00 6.31 6.38~ 6.83 2060
2065 8.53~ 11.30 9.10 11.68 10.33~ 7.91 7.58~ 6.76 6.82~ 7.38 2065
2070 9.15~ 12.12 9.75~ 12.51 11.05~ 8.49 8.15~ 7.29 7.26~ 7.94 2070
2075 9.78~ 12.92 10.40 13.34 11.78~ 9.05 8.73~ 7.87 7.70 8.49 2075
2080 10.40 13.75 13.85 12.50 9.30 8.43 2080
* actual values
~ estimated via interpolation
^ TR = Trustees Report
Source: 2001 Trustees Report of the Hospital Insurance Trust Fund, Table III.B1.;
2002 Trustees Report of the HI and SMI Trust Funds, Table II.A3.;
2003 Trustees Report of the HI and SMI Trust Funds, Table II.A3.;
2004 Trustees Report of the HI and SMI Trust Funds, Table II.A2.;
2005 Trustees Report of the HI and SMI Trust Funds, Table III.A2.;
U.S. Budget, FY 2003, Analytical Perspectives, Table 3-2;
U.S. Budget, FY 2004, Analytical Perspectives, Table 3-2;
U.S. Budget, FY 2006, Analytical Perspectives, Table 12-2;
U.S. Budget, FY 2006, Analytical Perspectives, Table 13-2
U.S. Budget, FY 2007, Analytical Perspectives, Table 13-2
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According to text in the Analytical Perspectives, the projections for
Medicare in the 2003, 2004, 2005, 2006, and 2007 Budgets are based on
the actuarial projections in the 2001, 2002, 2003, 2004, and 2005
Medicare Trustees Reports, respectively. Given this and the above
graph and table, the following points are evident:
1) Although the Budget projections are based on the Trustee Report
projections, they are never identical. There appears to be some
adjustment being made in every case.
2) The projections of Medicare outlays in the 2003 Budget are slightly
lower than the 2001 Trustees Report on which they are based. On
the other hand, the projections in the 2004 Budget are slightly
higher than the 2002 Trustees Report on which they are based. In
2075, the differences are 0.79 and 0.86 percent of GDP, respectively.
3) The projections in the 2005 Budget are much higher than the 2003
Trustees Report on which they are based. In 2075, the difference
is 2.73 percent of GDP. This is explained by accompanying text
that states that the figures are "adjusted for the effects of the
Medicare prescription drug and modernization bill enacted in
December 2003".
4) The projections in the 2006 Budget are much lower than the 2004
Trustees Report on which they are based and are a fair amount lower
than the previous budget's projections. In 2075, the differences
are 2.94 and 1.38 percent of GDP, respectively.
5) The projections in the 2007 Budget are similarly much lower than the
2005 Trustees Report on which they are based and are a small amount
lower than the previous budget's projections. In 2075, the differences
are 3.14 and 0.42 percent of GDP, respectively. The reason for the
large difference between the Budget and Trustees Report appears to be
explained by text on page 199 of the Analytical Perspectives which
states: "Medicare benefits are projected based on the estimates in
the 2005 Medicare trustees’ report, adjusted for differences in the
inflation rate and the growth rate in real GDP per capita".
