March 10, 2026  – Federal spending on Medicare and Medicaid is expected to rise sharply over the next decade, according to new projections released by the Congressional Budget Office (CBO). A recent report forecasts significant increases in both programs as the population ages and health care costs continue to climb.

According to the CBO’s latest budget outlook, Medicare spending is projected to grow from approximately $1.18 trillion in 2025 to about $2.42 trillion by 2036. That increase represents more than a doubling of federal spending on the program over an 11-year period.

Medicaid spending is also expected to rise, though at a slower pace. Federal Medicaid expenditures are projected to increase from $668 billion in 2025 to roughly $981 billion in 2036. That represents growth of nearly 50% during the same timeframe.

The projections are outlined in the CBO’s report titled The Budget and Economic Outlook: 2026 to 2036, which examines federal spending trends and economic conditions over the next decade.

Several factors are expected to drive the rapid increase in Medicare spending. The most significant is the continued aging of the U.S. population. As members of the baby boom generation reach retirement age and enroll in Medicare, the number of beneficiaries is expected to increase substantially.

The CBO estimates that between 2027 and 2036 the Medicare population will grow by about 15%. At the same time, health care costs are projected to continue rising faster than inflation in many areas of the health system.

Longer life expectancy is also contributing to the growth. As Americans live longer, they tend to require more medical services, which increases overall spending within the program.

Medicaid growth is expected to be influenced by somewhat different factors. From 2030 through 2036, Medicaid spending is projected to increase by roughly 4% annually. Much of that growth is linked to rising health care costs per enrollee.

While Medicare and Medicaid spending are expected to grow substantially, projections for other federal health programs show a more mixed outlook.

Spending on the Children’s Health Insurance Program (CHIP) is expected to decline over the next decade, while spending on premium tax credits and subsidies for insurance purchased through the Affordable Care Act marketplaces is expected to fluctuate. 

The report underscores the growing financial impact of federal health programs and highlights the continuing role demographic trends and health care costs will play in shaping the nation’s long-term budget outlook.