+1 212 318 2000
Europe, Middle East, & Africa
+44 20 7330 7500
+65 6212 1000
By Steve Teske
Sept. 17 --Federal health care spending on the government's major health programs will reach 8 percent of the nation's gross domestic product in 2038, up from 4.6 percent in 2013, the Congressional Budget Office said Sept. 17 in its annual long-term budget outlook report.
CBO acknowledged that the rate of Medicare and Medicaid spending increases have slowed in recent years, although the exact reasons remain vague. But it said the increase in federal spending on health care in the next 25 years will be tied to a sharp rise in the number of people receiving benefits.
Driving this will be the aging of the population and subsequent rise in Medicare enrollment, and availability of subsidies to help individuals purchase health insurance in the health care marketplaces under the Affordable Care Act, as well as Medicaid enrollment increases under the ACA, CBO said.
Over the next 25 years, aging will account for 35 percent of the spending growing in federal health programs relative to the GDP; excessive cost growth will account for 40 percent, while the federal subsidies will account for 26 percent, the report estimated.
CBO examined spending for Medicare, Medicaid, the ACA, and the Children's Health Insurance Program.
National health care spending, including all public and private sources, is expected to reach 22 percent of GDP by 2038, up from 16.4 percent in 2011, CBO said.
CBO said health care spending can't continue to rise faster than the increase in the GDP every year because it eventually would consume too much of individuals' incomes, restraining the consumption of other goods and services. Instead, there likely will be “mounting pressure” to slow health care cost growth, the report said.
CBO said the private sector will try to limit cost increases by, for example, working with insurers to make health care delivery more efficient, by limiting the amount of coverage offered or by offering a fixed contribution with which to purchase coverage in the marketplace.
State governments also may lower rates paid to providers under Medicaid and CHIP, limiting services they cover, or tightening eligibility requirements, CBO said.
Medicare spending may slow due to changes in the overall health care system that encourage more efficient delivery of care, and due to provisions contained in the ACA, such as initiatives launched by the Center for Medicare & Medicaid Innovation, the report said.
To contact the reporter on this story: Steve Teske in Washington at firstname.lastname@example.org
To contact the editor responsible for this story: Brian Broderick at email@example.com
The report is available at http://www.cbo.gov/sites/default/files/cbofiles/attachments/44521-LTBO_0.pdf.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to firstname.lastname@example.org.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).