Medicare’s financing problems extend well beyond its hospital insurance trust fund. In new analysis, the Cato Institute’s Romina Boccia and Ritvik Thakur estimate that borrowing to finance Medicare Parts B and D could add roughly $85 trillion to the national debt by 2056, including interest costs.

Medicare Debt is $85 trillion

Over just the next decade, Medicare’s doctors’ services, outpatient care, and prescription drug coverage are projected to add about $10.7 trillion to the debt, including interest, accounting for an estimated 44% of the federal deficit over that period.

SMI Accounts For 44 Percent of the 10-year deficit

The outlook is worsening quickly. Medicare Trustees now project $731 billion more in Part D spending through 2035 than they did a year ago, driven largely by the Inflation Reduction Act’s prescription drug changes. Boccia and Thakur argue Congress should put Medicare on a budget rather than allow rising Parts B and D costs to flow automatically into federal debt.

You can read the full analysis here. If you would like to speak with Romina about Medicare’s finances, prescription drug spending, or the program’s contribution to the national debt, please contact Cato PR at pr@​cato.​org.