Getzen Model of Long-Run Medical Cost Trends Update for 2026-2036+
December 2025
Author(s)
Kenneth S. Avner, FSA, MAAA,
Achilles Natsis, FSA, MAAA, FMLI
Society of Actuaries Research Institute
Executive Summary
The SOA Long-Term Healthcare Cost Trends Getzen Model is a tool for projection of expected growth rates in medical premiums and expenditures from 2030 to 2105; particularly in the estimation of reportable liabilities for retiree health benefits in accordance with FASB and GASB standards. The model projects percentage growth rates and the health share of GDP for the next 80 years using equations and assumptions developed by the authors with the assistance of an SOA Research Institute working group. If desired, the user can change the model input cells to specify alternative assumptions regarding responsiveness to local conditions, external trends, income growth, and other factors to arrive at alternative projections. The model adds transparency to the economic assumptions behind the medical trend assumption.
Some key observations from this year’s projection include the following:
- Long-run medical cost increases are estimated at 5.0% per year eventually declining to match the rate of increases in per capita income.
- The following component assumptions of long-run medical cost increases were changed from last year:
- Long-run health share of GDP was increased to 20.0% from 19.0%.
- The health care share resistance point was increased to 18.5% from 18.0%.
- Short-run medical trends for the first three projection years of the model were eliminated to allow actuaries using the model to support those inputs.
- The Society of Actuaries Research Institute’s Getzen Model Project Oversight Group (POG) expects that there will be greater budgetary resistance and more regulation in the future, which will limit the share of total income/GDP devoted to medical care.
Materials
Getzen Model of Long-Run Medical Cost Trends-Update for 2026-2036
Acknowledgements
The researchers’ deepest gratitude goes to those without whose efforts this project could not have come to fruition: the Project Oversight Group for their diligent work overseeing, reviewing, and editing this report for accuracy and relevance.
Project Oversight Group members:
Bill Byrd, FSA, MAAA, CERA
Michael DeLeon, ASA, MAAA, EA, FCA
Chris Lombardi, FSA, MAAA, CERA
Robert Schmidt, FSA, MAAA, EA
Rebecca (Becca) Trauger, FSA, FCA, MAAA
Eric Viney, ASA, MAAA, FCA
Eric Walters, ASA, MAAA
At the Society of Actuaries Research Institute:
Achilles Natsis, FSA, MAAA, Health Research Actuary
Barbara Scott, Senior Research Administrator
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Previous Models
Getzen Model Update for 2025-2035+
Getzen Model Update for 2024-2034+
Getzen Model Update for 2023-2033+
Getzen Model Update for 2022-2030+
Getzen Model Update for 2021-2030+