CMS Projections for Future Health Care Spending
Friday, February 05, 2010
Yesterday, CMS released its annual report projecting health spending for the coming decade. The report can be found on the Health Affairs website here.
This report emphasizes why a government-takeover of health care will only exacerbate our entitlement problem. Major take-aways:
- Health care spending continued to rise in 2009, growing by 5.7% to an estimated $2.5 trillion.
- Spending by private payers in 2009 rose only 3%, while spending by public payers rose 8.7%.
- While federal spending on Medicaid increased 20.8% in 2009, State spending on the program declined by 8.6%, reflecting the shift in funding from the States to the federal government as a result of provisions in the “stimulus” bill. Federal spending on Medicaid is projected to increase by another 10.8% this year.
- Health care will grow as a share of the overall economy from 16.2% in 2008 to 19.3% in 2009, with public spending accounting for 52% of all health expenditures in 2019.
- In 2019, federal health spending is projected to total more than $1.7 trillion, nearly double the $918.6 billion projected for this year. By 2019, total federal spending on health care will nearly match private spending on both health insurance and out-of-pocket payments combined.
It is important to note that the same CMS actuaries who compiled yesterday’s report on projected health expenditures have also found that both the House and Senate health care bills would raise nationwide spending on health care.