CBO Predicts Federal Health Care Spending To Hit 10% of GDP by 2035
The expected increase comes despite many of the planned provisions of the federal health reform law intended to control rising health care spending.
CBO also provided estimates under an "alternative" scenario, which included assumptions that many lawmakers feel are more realistic, such as the repeal of the Medicare physician payment system. Under that scenario, CBO estimated that:
- Federal Medicare spending would increase from 3.7% of GDP in 2011 to 7% of GDP in 2035;
- Federal spending on Medicaid and the Children's Health Insurance Program would increase from 1.9% of GDP in 2011 to almost 4% of GDP in 2035; and
- Total national spending on health care would increase from 16.5% of GDP in 2009 to about 26% of GDP in 2035.
CBO repeated its conclusion that Medicare's Hospital Insurance Trust fund would become unsustainable in 2020. Further, CBO predicted that the gap between Medicare revenue, in the form of payroll taxes, and Medicare spending will continue to grow for at least 75 years (Daly, Modern Healthcare, 6/22).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.