Total federal health care spending will increase from 5.6% of gross domestic product in 2011 to as much as 10% of GDP by 2035, according to recent CBO estimates, Modern Healthcare reports.
The expected increase comes despite many of the planned provisions of the federal health reform law intended to control rising health care spending.
CBO also provided estimates under an "alternative" scenario, which included assumptions that many lawmakers feel are more realistic, such as the repeal of the Medicare physician payment system. Under that scenario, CBO estimated that:
- Federal Medicare spending would increase from 3.7% of GDP in 2011 to 7% of GDP in 2035;
- Federal spending on Medicaid and the Children's Health Insurance Program would increase from 1.9% of GDP in 2011 to almost 4% of GDP in 2035; and
- Total national spending on health care would increase from 16.5% of GDP in 2009 to about 26% of GDP in 2035.
CBO repeated its conclusion that Medicare's Hospital Insurance Trust fund would become unsustainable in 2020. Further, CBO predicted that the gap between Medicare revenue, in the form of payroll taxes, and Medicare spending will continue to grow for at least 75 years (Daly, Modern Healthcare, 6/22).