By Andrea M. Sisko, Sean P. Keehan, John A. Poisal, et al, Office of the Actuary, Centers for Medicare and Medicaid Services
Health Affairs, Published Ahead of Print, February 20, 2019
Abstract
National health expenditures are projected to grow at an average annual rate of 5.5 percent for 2018–27 and represent 19.4 percent of gross domestic product in 2027. Following a ten-year period largely influenced by the Great Recession and major health reform, national health spending growth during 2018–27 is expected to be driven primarily by long-observed demographic and economic factors fundamental to the health sector. Prices for health care goods and services are projected to grow 2.5 percent per year, on average, for 2018–27—faster than the average price growth experienced over the last decade—and to account for nearly half of projected personal health care spending growth. Among the major payers, average annual spending growth in Medicare (7.4 percent) is expected to exceed that in Medicaid (5.5 percent) and private health insurance (4.8 percent) over the projection period, mostly as a result of comparatively higher projected enrollment growth. The insured share of the population is expected to remain stable at around 90 percent throughout the period, as net gains in health coverage from all sources are projected to keep pace with population growth.
Conclusion
During the past ten years the lingering effects of the Great Recession, coupled with the coverage and payment provisions of the Affordable Care Act, have significantly influenced the trends in health care spending and enrollment in the United States. Over the next decade, however, the outlook for health spending and insurance coverage is expected to be primarily driven by long-observed demographic and economic factors fundamental to the health sector. While the national health spending growth rate is projected to average 5.5 percent per year for 2018–27, annual growth is expected to generally accelerate over much of the projection period. Medicare spending growth is expected to accelerate and be the fastest among the major payers, reflecting not only the continued enrollment shift of the baby-boom generation into the program but also the growth rate for use and intensity, which is projected to gradually increase toward the rates observed during Medicare’s long-term history. Growth in health care prices, reflecting both economywide and relative personal health care price inflation, is also expected to rebound somewhat toward rates more consistent with the period before the Great Recession and to return to a state in which personal health care price growth exceeds that of economywide price inflation. Finally, recent and anticipated faster growth in disposable personal income is expected to lead to an increased demand for services, albeit with a lag, and put upward pressure on the pattern of private health insurance and out-of-pocket spending growth over the projection period.
https://www.healthaffairs.org…
Comment:
By Don McCanne, M.D.
National health expenditures are projected to grow at an average annual rate of 5.5 percent for 2018–27 and represent 19.4 percent of gross domestic product in 2027, driven primarily by long-observed demographic and economic factors fundamental to the health sector.
There are a couple of items of special interest:
- Annual growth is expected to generally accelerate over much of the projection period as we leave behind us the lingering effects of the Great Recession.
- Growth in health care prices is expected to rebound somewhat toward rates more consistent with the period before the Great Recession and to return to a state in which personal health care price growth exceeds that of economywide price inflation.
- Medicare spending is expected to grow faster than Medicaid or private insurance spending because of higher projected enrollment growth and an increased growth rate in use and intensity of services.
- The percentage of uninsured is expected to remain around ten percent.
Of these, perhaps the most alarming is the fact that the authors anticipate that a decade from now we will still have tens of millions uninsured. Apparently they do not predict enactment of major health reform legislation. We should press for an all out effort to screw up their prediction by finally making Single Payer Medicare for All a reality.
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