On Tuesday, the Congressional Budget Office released an economic outlook predicting that the cost of government health care programs -- including Medicare and Medicaid -- will more than double across the next 10 years.
According to CBO's outlook, federal spending on health care programs will increase to $1.8 trillion by 2022 and account for about 7% of the nation's economy. CBO said the biggest driver of the projected health care spending increase is the aging U.S. population.
CBO estimates that Medicare spending will rise by 90% by 2022, assuming Congress allows a 27% physician pay cut to take effect in March.
However, if lawmakers delay the cuts for the next decade and freeze physician pay rates at 2011 levels, CBO says Medicare spending would increase by an additional $316 billion across 10 years (Baker, "Healthwatch," The Hill, 1/31).
Overall, CBO predicted that the federal deficit likely will surpass $1 trillion in fiscal year 2012 for the fourth consecutive year and that unemployment would remain above 7% until 2015 (Peterson/Paletta, Wall Street Journal, 1/31).