Spending on health care in the U.S. has been down since the recession, but the Office of the Actuary at the Centers for Medicare and Medicaid Services says that's going to change.
Its latest 10-year look-ahead shows spending to grow an average of 5.7 percent per year from 2013 to 2023. With the 3.6 percent rate of 2013 and estimated 5.6 percent hike in 2014 eliminated from the formula, the rate should jump to 6 percent annually between 2015 and 2023.
Should those numbers be achieved, they will slightly outpace the projected increase in the U.S. GDP.
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CMS's numbers crunchers cited "increased insurance coverage via the Affordable Care Act, projected economic growth, and population aging" as principle engines of the growth. The rate is still less than that the annual average of 7.2 percent experienced in 1990 to 2008, prior to the recession. Then, health care spending growth outpaced the GDP by an average of 2 percent per year.
If the projections are accurate, the report said, the result will be "an expected 19.3 percent health share of nominal GDP in 2023, up from 17.2 percent in 2012."
The authors of the study said the historically low 2013 rate was influenced by "a modest economic recovery, the effect of sequestration on Medicare expenditure growth, and continued slow growth in the use of Medicare services," as well as other factors.
"Analysis of historical trends tells us that health care spending tracks with economic growth, so as the economy is anticipated to improve over the next decade, health spending growth is projected to grow faster," said Andrea Sisko, the lead author for the study. "This, in addition to the baby boomers aging and increased insurance coverage mandated by ACA, is expected to result in the health share of GDP rising to nearly one-fifth of the nation's economy by 2023."
The full study can be found here.
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Dan Cook
Dan Cook is a journalist and communications consultant based in Portland, OR. During his journalism career he has been a reporter and editor for a variety of media companies, including American Lawyer Media, BusinessWeek, Newhouse Newspapers, Knight-Ridder, Time Inc., and Reuters. He specializes in health care and insurance related coverage for BenefitsPRO.
