Industry News

On August 4, 2025, the Center for Retirement Research (CRR) at Boston College published its issue brief, Medicare Finances: A Perspective on the 2025 Trustees Report. The brief provides: 1) an overview of the Medicare program; 2) the 2025 Medicare Trustees Report’s projections that use current law assumptions; 3) a comparison of the current-law projections to an alternative scenario prepared by Medicare’s Office of the Actuary; and 4) possible reasons for Medicare’s high costs.

The brief summarizes the current state of Medicare’s finances based on the 2025 Medicare Trustees Report released in June 2025. According to the report, the Medicare program accounts for 21% of national health care spending and 13% of the federal budget.

Some of the other key findings include:

• Overall, the Medicare program, which operates within the U.S. health care system, is very expensive and costs twice as much as health care systems in other countries.
• The findings indicate that if the constraints on reimbursements to physicians and hospitals prevent Medicare beneficiaries from accessing care, it is likely that costs will increase significantly higher than the Trustees project.
• Medicare Advantage plans cover more than 50% of beneficiaries, which costs 20% more per recipient than traditional Medicare.
• Although Medicare cannot repair the U.S. health care system, reductions in the overpayments to Medicare Advantage plans should be addressed.

The brief is available here.