Health Spending to Double by 2017
Medical Costs Will Account for 20% of U.S. Economy, Report States
Feb. 26, 2008 -- Health care spending will take up a fifth of the U.S.
economy in the next decade, according to government economic projections
Government economists predict that the nation's total health care bill will
nearly double from $2.2 trillion this year to $4.3 trillion by 2017. They also
find that families and employers will spend less and less on health care as the
economy slows and leaves fewer resources to cover medical costs.
Government economists called their assessment conservative because it
assumes that current Medicare spending laws will
remain in effect over the next decade. That includes deep cuts in government
payments to doctors, which lawmakers are expected to repeal.
"Because Medicare projections are based on current law, they are likely
understated," concludes the report, issued by the Centers for Medicare and
Medicaid Services and published in the health policy journal Health
The projections, though daunting, also show that health spending will grow
at a steady 6.7% rate each year until 2017. But health costs will consume an
ever-increasing portion of the gross domestic product as the economy slows,
The predictions come one day after the Bush administration unveiled a new
bill designed to cut Medicare spending. The bill was mandated by a law
requiring new legislation as soon as certain spending thresholds are met, and
such major legislation is unlikely to be passed this year, lawmakers say.
The bill was introduced in both houses of Congress. But some Democrats
said they had no intention of advocating for cuts proposed by the White
"I am required by law to introduce the White House's legislation on
Medicare today, but I'm compelled by my commitment to America's seniors to
insist on better solutions," Sen. Max Baucus (D-Mont.), chairman of the
Finance Committee, said in a statement.
Many Republicans have called for curbs in Medicare spending, including cuts
to hospitals and other health providers. "Medicare is not sustainable on
its current path. Soaring costs and a growing number of beneficiaries
threaten to overwhelm the program," Rep. Jim McCrery (R-La.), the senior
Republican on the House Ways and Means Committee, said in a statement.
The projections also come as Democratic candidates Sen. Hillary Clinton
(D-N.Y.) and Barack Obama (D-Ill.) continue to debate their health plans. Both
candidates vow to improve access to insurance and to cut health costs.
Those plans would have to be passed by Congress before they could be put
into effect. But Tuesday's report suggested that they might do little to curb
overall spending, at least in Medicare. That plan is expected to continue
growing at 6.7% per year as the "leading edge" of the baby-boom
generation becomes eligible for government-sponsored health care, the report