WASHINGTON — Despite a recent easing of medical costs, the nation’s health care spending will keep outpacing economic growth for the foreseeable future, government experts said Tuesday in a forecast that signals more upheaval for Medicare and Medicaid, as well as private insurance.
President Barack Obama’s health care overhaul will add $478 billion in spending over the 2011-21 period covered by the projections, expanding coverage to about 30 million uninsured people. But the issue of rising costs will not go away even if the Supreme Court overturns Obama’s law or his Republican foes ultimately succeed in repealing it.
By the beginning of the next decade, health care spending will be growing roughly 2 percentage points faster than the overall economy, “which is about the same differential experienced over the past 30 years,” said the report from Medicare’s nonpartisan Office of the Actuary.
The findings have implications for both political parties. If health care spending isn’t brought in line with overall economic growth, Americans will eventually face agonizing choices between paying medical bills and funding other priorities such as education and infrastructure.
By 2021, health care will account for 20 percent of the U.S. economy, the report found, up from under 14 percent in 2000. Controlling costs is one of the keys to solving federal budget woes, but that probably can’t be done without major changes to Medicare and Medicaid.
This year the biggest question has been whether fledgling payment reforms in Obama’s law, mirrored by private insurance plans, are succeeding in holding costs down. The rate of growth the past three years has hovered under 4 percent, historically low. That’s coincided with a shift to paying hospitals and doctors for better quality, not just their sheer volume of tests and procedures.
