US federal health spending will keep growing over the next 25 years but at a slower-than-expected pace, the Congressional Budget Office said Tuesday in its annual long-term study.
CBO also forecast that the country’s deficit will continue to shrink in the coming years due to current budgetary adjustments, from 3.9 percent of gross domestic product in 2013 to 2.0 percent of GDP in 2015.
But that rate will rise to 3.3 percent a decade from now, and 6.4 percent in 2038, according to the independent agency, because of steadily rising health-care costs and an aging population.
The new health cost estimates — which should contribute to the debate over President Barack Obama’s landmark health care law, parts of which enter into force on October 1 — reflect a slower-than-expected growth to 8.0 percent in 2038, compared with a 4.6 percent increase this year.
In June 2012, CBO had projected that the federal government’s spending for health care would be 9.6 percent of GDP in 2037.
“In the absence of changes in federal law, growth in per capita spending on Medicaid and on health care financed through the private sector will gradually slow,” CBO said in its report.
“The rate of growth of Medicare spending per beneficiary is also likely to slow, though to a lesser extent, even without changes in federal law,” reflecting changes in medical practices and payment rates and “increasing pressure of premiums.”
The CBO economists also warned that the US public debt, currently equivalent to about 73 percent of GDP, is expected to fall to 68 percent by 2018, before rising to 100 percent of GDP by 2038 unless reforms to public pension programs like Social Security are enacted.
US health costs rise more slowly than expected: agency
