The national spending on health care is expected to become nearly one-fifth of the U.S. economy in the next nine years. Image from Wikimedia Commons.
Recent studies by federal auditors found that at current rates, spending on healthcare in America could make up 20 percent of the American economy by 2020. The rise in spending would be because of greater subsidies for insurance under healthcare reform laws.
Economic growth overall slower than growth of health spending
A recently released study by the U.S. Centers for Medicare and Medicaid Services, according to Bloomberg, found that spending on healthcare was outpacing the growth of the U.S. economy as a whole. At the projected rate of expansion, healthcare spending could be up to 20 percent of the American gross domestic product by 2020. The Office of the Actuary released the study in the journal Health Affairs. The study found that health care spending had increased to $2.6 trillion from 2009 to 2010, an increase of 4 percent. However, the national expenditure on health care is expected to grow by 5.8 percent per year until 2015, when health care costs will begin to grow by 6.2 percent per year. That would be 1.1 percent faster than projected economic growth for the American economy as a whole.
Public subsidies to fuel increase
The increase in health care spending from 2010 to 2020 is expected to be fueled by greater demand for health services and public utilization of subsidized health insurance under the health care reform laws, often referred to as “Obamacare.” The portion paid for by the federal government is expected to increase from 27 percent to 31 percent in that time, according to UPI, but when the expected contributions from state and municipal governments are included, the increase from 2010 to 2020 is expected to grow from 45 to 49 percent. However, according to a blog post on NPR, the study also found that the difference between health care spending with the Affordable Care Act, the law that is referred to as “Obamacare” though the president didn’t author it, would be only 0.01 percent.
Millions to get coverage
Through the Affordable Care Act, an estimated 30 million more people will have access to health care. Most of them will be relatively young and healthy, but it will still raise the demand for physician’s services and prescription drugs. However, the older generations are not as optimistic about health costs in the interim. Baby boomers, according to NPR, are becoming somewhat more unsettled about meeting health care costs after retirement. An Associated Press poll of people who were born between 1946 and 1964 found that 43 percent were concerned with being able to pay for long-term care costs. The poll also found that 41 percent were especially concerned with the possibility of losing their financial independence as a result of paying for health costs. Baby boomers in the AP poll were more concerned about paying for their health care costs than they were with being diagnosed with a fatal or debilitating illness.
Sources
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