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How Medicare Spends Its Money

Benefits totaled $515.8 billion in 2010. Main categories included:

  • Hospitals: $168 billion
  • Skilled Nursing Facilities: $26.9 billion
  • Home Health Care: $19.1 billion
  • Physician Fee Schedule Services: $64.5 billion
  • Private health plans: $115.9 billion
  • Prescription Drugs: $61.7 billion
  • Other: $59.9 billion (includes spending on durable medical equipment such as wheelchairs and walkers, money given to hospitals to cover education and training for new doctors, and payments to hospitals that treat large numbers of people who are poor.)

The average benefit spending for the 48 million persons enrolled in Medicare was  $11,762 during 2010.

In 2010, Medicare paid $7 billion in administrative expenses for the Hospital Insurance and Supplementary Medical Insurance Trust Funds combined. Administrative expenses equaled 1.4 percent of benefit payments.

For more information on how Medicare spends its money, see:

The official Medicare website is