U.S. will pay for half of all health care costs by 2020
By Parija Kavilanz @CNNMoney July 28, 2011: 5:16 AM ET
New report from Centers for Medicare and Medicaid Services estimates total health care spending will hit $4.6 trillion, 50% f of which will be paid by the government, up from 44% in 2009.
New report from Centers for Medicare and Medicaid Services estimates total health care spending will hit $4.6 trillion, 50% f of which will be paid by the government, up from 44% in 2009.
NEW YORK (CNNMoney) -- The U.S. government will foot the bill for half of all health care costs in the United States by 2020, according to a government report released Thursday.
That's up from 44% just two years ago, and reflects both the rising cost of health care and the fact that millions more people will have access to it under health reform, said the Centers for Medicare and Medicaid Services.
Total health care spending is expected to nearly double to $4.6 trillion in 2020 from $2.6 trillion in 2010.
The agency makes these projections annually, but this is the first year that they include the impact of health reform, which expands insurance coverage to millions through government subsidized initiatives.
By 2020, nearly 30 million additional people are expected to have health insurance because of reform. But that will only have a marginal impact on health spending over the next few years, the report said.
From 2010 through 2020, the government expects health care spending to grow at an average annual rate of 5.8% -- including the impact of health reform. The CMS had previously forecast a growth rate of 5.7%.
Still, the new estimate far outpaces projected growth in the U.S. economy. The government estimates that by 2020, health care spending will account for 20% of the nation's economic output, up from 17.6% of GDP in 2010.
Over the 10-year period, the report showed that the biggest annual jump in health care spending will happen in 2014 when health reform is fully implemented.
CMS estimates that in 2014 about 23 million uninsured consumers will gain access to health insurance, mainly through government programs such as Medicaid and through the creation of federal and state-funded health insurance exchanges.
Your family's health care costs: $19,393
As a result, the government expects Medicaid spending to surge 20% in 2014 and private health insurance spending to increase 9.4%.
As millions more gain access to health insurance, the government expects spending on prescription drugs, physician and hospital services to increase as well.
CMS expects prescription drug spending to jump by 10.7% in 2014 and to account for 11% of national health spending by 2020. Spending on physician and clinical services is forecast to rise by 8.9% by 2014, representing 19% of overall health care spending.
Hospital bills are forecast to account for 30% of overall health care spending by 2020. To top of page"
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