THURSDAY, July 28 (HealthDay News) -- The rate of growth in U.S.
health care spending is expected to pick up speed so that the
nation will shell out $4.6 trillion for services by 2020, a new
And an increasing amount of that bill -- almost half -- will be
paid for by government.
Growth in health care spending dipped to a "historic low" of 3.9
percent in 2010 because of the recession, the experts said. But the
new report, from Medicare's Office of the Actuary, projects that by
2014 -- when many provisions of the new health care reform law kick
in -- growth in spending will accelerate to 8.3 percent.
That rate of growth outstrips any projected increase in the
United States' gross domestic product, the experts noted.
The rise in health care costs is due to several factors. These
include a growing and aging population, more seniors enrolling in
Medicare, and the expansion of Americans' access to Medicaid and
private insurance under the new health care reform law.
"We have projected health care costs to grow at an average rate of 5.8 percent a year for 2010 to 2020," lead report author Sean P. Keehan, an economist in the Office of the Actuary at the U.S. Centers for Medicare and Medicaid Services, said during a Wednesday afternoon press conference.
The report also contends that health care reform, which should
allow an estimated 30 million Americans to gain access to coverage,
will only contribute modestly to the upsurge in spending. According
to Keehan, without the Affordable Care Act the rate of growth for
health care costs would have been 5.7 percent a year, so that "the
Affordable Care Act only adds 0.1 percent to growth."
Still, changes brought about by health care reform, are
"expected to increase the demand for health care significantly,
especially in the sectors of prescription drugs and clinical and
physician services," Keehan noted.
And there's no denying that taxpayers will shoulder more of the
costs of health care in the United States over the coming
"Robust growth in Medicare enrollment, expanded Medicare coverage, and premium and cost-sharing subsidies for [health care insurance] exchange plans are projected to increase the federal government share of health spending from 27 percent in 2009 to 31 percent by 2020," the report's authors concluded. Add in monies spent by state and local government, and the public's share of the tab for health care expenditure rises to just under 50 percent, according to the report.
As government spending increases, so will costs to individuals,
the report notes. "Households and private businesses are
anticipated to pay for a smaller portion of the nation's health
bill than they would have without the Affordable Care Act, but
still will face a growing burden on their respective limited
resources," the authors wrote.
"As health care spending goes up, each person's expenses on health care is also expected to go up," Keehan concurred.
Health care costs are also expected to rise faster than the U.S.
economy will grow, the researchers warned. Gross domestic product
(GDP) -- a measure of overall economic growth -- is expected to
rise by only 4.7 percent a year over the next decade, Keehan said.
Crunching the numbers, "that would cause an increase in health
care's share of GDP from 17.6 percent in 2010 to 19.8 percent in
2020," he explained.
Still, Richard Hamburg, deputy director of the non-partisan
advocacy group Trust for America's Health, said he believes that
the rise in expenditure will be an important investment in a
"From our perspective, the great new investment in the Affordable Care Act is the attention to prevention and public health," he said. "Over time, investing in wellness and prevention programs will save money down the line; and while we save lives we will decrease the incidence of chronic diseases and save significant costs."
"People will live longer, more productive lives," Hamburg said.
The report was published in the August issue of
To see the full report, visit
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