National health care spending is expected to hit $4.6 trillion by 2020, up from a projected $2.7 trillion this year, according to a report from CMS' Office of the Actuary published on Thursday in Health Affairs, the AP/Washington Post reports (AP/Washington Post, 7/28).
The annual analysis by CMS economists and actuaries determined that U.S. health care spending in 2020 would account for 19.8% of overall U.S. spending, up from 17.6% in 2009 (Seaman, Reuters, 7/28). According to the report, health care spending is projected to average about $13,710 per person by 2020, up from $8,650 per capita this year.
The report found that health care spending in 2010 grew by only 3.9% -- a historically low rate -- which experts attributed to the economic downturn (AP/Washington Post, 7/28).
However, the authors said they expect the largest annual health care spending increase -- 8.3% -- to occur in 2014, when many federal health reforms take effect. From 2015 to 2020, the report predicts that spending growth will average about 6.2% annually (Reuters, 7/28).
The report primarily attributed health care spending growth to an aging U.S. population and costly medical innovations (AP/Washington Post, 7/28). The report also attributed spending growth to increased health insurance access.
Reform Law To Increase Annual Health Spending Growth
The report found that annual growth in health care spending over the next decade is expected to average 5.8%. The authors say that figure would be 0.1 percentage point lower without the overhaul (Reuters, 7/28).
However, by 2020, the growth rate is expected to roughly equal what it would have been without the reform law, according to the report.
The report notes that the overhaul will change who pays for the country's medical expenses by the end of the decade. For example, 49% of health care spending in 2020 will come from federal, state and local government funds, up from 45% in 2010. Meanwhile, private businesses will account for 18% of health care spending, down from 20% in 2010 (Adamy, Wall Street Journal, 7/28).
According to the report, some large businesses will end employee health insurance programs, which will force an estimated 13 million employees to obtain coverage through state health insurance exchanges or through Medicaid (Reuters, 7/28).