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
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
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
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.
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
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.