Medical Spending To Hit $4.6 Trillion By 2020
A study published on July 28, 2011 by the US Office of the Actuary at the U.S. Centers for Medicare and Medicaid Services, revealed that by the year 2020 the cost of healthcare in the US will expand to $4.6 trillion per year. This study shows that healthcare spending is growing at a much faster pace than the US economy.
Several news outlets reported on the study including a July 28, 2011, article in the San Francisco Chronicle that posted some ominous facts about healthcare spending, noting that, “America’s health care bill will jump from $2.7 trillion this year to $4.6 trillion in 2020. It will take $1 of every $5 in the economy instead of the current $1 out of $6 and go from $8,650 per capita up to $13,710.”
A July 28, 2011, Health Day article published in the US News and World Reports that as we get closer to the year 2020, more and more of the total cost of healthcare will be picked up by the US government. Although still outpacing the economy, healthcare costs actually slowed in 2010 to only 3.9 percent growth. That number is expected to rise to over 8 percent as the new healthcare system is phased in, and the Baby Boomers get older and rely on more medical care.
Lead report author, Sean P. Keehan, an economist in the Office of the Actuary at the U.S. Centers for Medicare and Medicaid Services stated, “We have projected health care costs to grow at an average rate of 5.8 percent a year for 2010 to 2020.”
Keehan also noted in the study that the growth of healthcare would have averaged 5.7 percent between 2010 and 2020 if there were no new “Affordable Care Act” commonly referred to as Obamacare. This means that the effect of the new healthcare system is only one tenth of one percent increase in cost. However, the author notes that, simultaneously, by 2020, nearly thirty million Americans are expected to gain health insurance coverage as a result of the Affordable Care Act.
Not everyone sees the increase in spending as a problem. Some note that some of the increase is for preventative and wellness services, thus saving money and promoting health. Richard Hamburg, deputy director of the non-partisan advocacy group Trust for America’s Health, summed up his thoughts in the Health Day article by noting, “From our perspective, the great new investment in the Affordable Care Act is the attention to prevention and public health. Over time, investing in wellness and prevention programs will save money down the line; and while we save lives we will decrease the incidence of chronic diseases and save significant costs”. He ended by saying, “People will live longer, more productive lives.”