As this Paragon PIC shows, federal spending on health care programs consumed roughly 62 percent of all individual federal income, corporate federal income, and Medicare payroll tax revenue in 2025 — up from 29 percent 25 years ago (in 2000) and 17 percent 50 years ago (in 1975). According to the Centers for Medicare and Medicaid Services, total national health expenditures reached $5.3 trillion in 2024, or 18 percent of GDP, with federal health care spending at $1.7 trillion. Federal policies affect most of the remainder, too.
In this PIC, Medicare spending is shown net of premiums, since those premiums are paid by enrollees, not taxpayers. Medicare Part A (Hospital Insurance) payroll tax revenue is included in the revenue line because it is dedicated by law to finance Part A and represents taxes on current workers. Part A payroll taxes cover only a fraction of total Medicare costs as Parts B and D are funded primarily through general revenue. While Medicare costs continue to escalate, so do costs in other programs, particularly Medicaid and the Affordable Care Act subsidies to insurers.
