Medicare spending will get so out of control over the next decade that the federal government will either have to cut spending or raise taxes, a new report finds.
The nonpartisan Congressional Budget Office projected that Medicare spending will rise from 2.9 percent of gross domestic product in 2014 to 3.6 percent in 2025 and increase further in later years, according to a report released Monday.
Part of the reason is the aging of baby boomers as they become Medicare-eligible, the agency said. Another is increased life expectancy at age 65, when people can start getting Medicare benefits.
From 2015 to 2040, the agency projects that the share of the U.S. population age 65 or older will grow from almost 15 percent to more than 21 percent, the report said.