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Healthcare Spending Skyrocketing: Federal Officials

By Nick Tate   |   Friday, 18 Oct 2013 04:35 PM

If you think your medical bills are higher than ever before, it's not just your imagination.

New federal government estimates show healthcare costs in the U.S. are projected to rise at least 4 percent this year and, beginning in 2014, will grow at an even-higher annual rate of 5.8 percent over the next nine years.
The findings, reported by the Office of the Actuary at the Centers for Medicare and Medicaid Services,  project healthcare spending in the U.S. will grow at rate that is 1 percentage point greater than the expected growth in the nation’s Gross Domestic Product — a measure of the nation's overall economy.
Editor's Note: ObamaCare Is About to Strike Are You Prepared?

By 2022, healthcare spending will account for nearly one-fifth of the GDP — up from the 2011 level of 17.9 percent, according to the new report, published online in the journal Health Affairs.
The projections reflect a combination of factors, including provisions of Obamacare that increase health insurance coverage and forecast changes in the nation's economy.
The report said, based on health spending and economic trends over the past 50 years, future growth in medical expenditures is likely to accelerate as economic conditions improve.
"Although projected growth is faster than in the recent past," said Gigi Cuckler, the lead author for the study, "it is still slower than the growth experienced over the longer term."
For 2013 healthcare spending growth is projected to be about 4 percent, partly because of the sluggish economic recovery and slow growth for Medicare and Medicaid spending.

But starting next year, growth in national health spending will accelerate to 6.1 percent, reflecting expanded insurance coverage through Obamacare, through Medicaid and the Affordable Healthcare Exchanges.
By 2022, Obamacare is projected to reduce the number of uninsured Americans by 30 million, increasing cumulative health spending over the next decade by $621 billion.
The increased use of medical services and goods, especially prescription drugs and physician and clinical services, among the newly insured will boost spending increases in Medicaid (12.2 percent) and private health insurance (7.7 percent), the report said.

Editor's Note: ObamaCare Is About to Strike Are You Prepared?
Other key findings:
  • In 2014, as the major provisions of Obamacare take effect — including the expansion of Medicaid and the Individual Mandate requiring all Americans to have insurance — growth in spending will hit 6.1 percent.
  • Many of the 11 million newly insured Americans next year will be younger and healthier, and will spend more on prescription drugs and physician and clinical services, and less on hospital care.
  • Medicaid enrollment will increase by 8.7 million people in 2014, with total Medicaid spending projected to grow to $490.0 billion, as a result of Obamacare.
  • In 2015, national health spending will remain near 6 percent because millions more Americans will gain insurance coverage through Medicaid or the exchanges, and the pace of economic growth is expected to increase to its highest level since 2006.
  • From 2016 to 2018, healthcare spending will average 5 percent annually and be influenced by an improving economy and increases in disposable income.
  • From 2019 to 2022, Medicare expenditures will grow 7.9 percent per year, compared to 7.3 percent from 2016 to 2018, as Baby Boomers continue to enroll in the program.
  • Medicaid spending will grow by 7.9 percent on average in 2015 and 2016, and 6.6 percent from 2017 to 2022, primarily because of an increasing proportion of older and disabled Americans.
  • From 2016 to 2022, improved economic conditions are expected to result in average private health insurance spending growth of 5.8 percent per year.
  • By 2022 healthcare financed by federal, state, and local governments will account for roughly half of all national health expenditures ($2.4 trillion). The federal government will account for more than 63 percent of this total, reflecting expanded Medicaid and Medicare enrollment, and federal subsidies offered through the Affordable Healthcare Exchanges.

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