Health Care Will Cost $4 Trillion by 2017

Gov't Projects That Medical Expenses For An Aging Population Will Be 20% Of GDP

(AP)  By 2017, total health care spending will double to more than $4 trillion a year, accounting for one of every $5 the nation spends, the federal government projects.

The 6.7 percent annual increase in spending - nearly three times the rate of inflation - will be largely driven by higher prices and an increased demand for care, the Centers for Medicare and Medicaid Services said Monday. Other factors in the mix include a growing and aging population. The first wave of baby boomers become eligible for Medicare beginning in 2011.

With the aging population, the federal government will be picking up the tab for a growing share of the nation's medical expenses. Overall, federal and state governments accounted for about 46 percent of health expenditures in 2006. That percentage will increase to 49 percent over the next decade.

"Health is projected to consume an expanding share of the economy, which means that policymakers, insurers and the public will face increasingly difficult decisions about the way health care is delivered and paid for," CMS economists said.

Overall health care spending in 2017 was estimated to increase to $4.3 trillion. That would be about 20 percent of U.S. gross domestic product, or GDP, the total monetary value of all finished goods and services produced in a country.

In 2006, people and the government spent $2.1 trillion on health care, an average of $7,026 a person. In 2017, health spending will cost an estimated $13,101 a person.

In his budget for next year, President Bush recommended slowing the yearly growth of Medicare from about 7 percent to about 5 percent. The slowdown would occur primarily by freezing reimbursement rates for the next three years to scores of health care providers, such as hospitals, nursing homes and home health centers. Bush also proposed requiring wealthier Medicare beneficiaries to pay higher monthly premiums when participating in Medicare's prescription drug coverage plan.

Those recommendations would reduce spending by nearly $178 billion over five years, but have little chance of passage in Congress. Health and Human Services Secretary Mike Leavitt has acknowledged the unpopularity of the recommendations, but he said politicians must make some hard decisions. The longer lawmakers wait, the more difficult the decisions will be.

"Medicare, on its current course, is not sustainable," Leavitt testified.

Democratic lawmakers also have proposed ways to slow health spending, primarily by trimming payments to private insurers who oversee health coverage for nearly 9 million Medicare beneficiaries. A growing number of the nation's elderly and disabled are electing to get health coverage through private plans that contract with the federal government and government economists predicted that trend will continue. Now, about one in six beneficiaries get their health benefits through a private plan. By 2017, more than one in four beneficiaries will get their coverage that way, Medicare officials said.

Health experts tell Congress that Medicare pays much more for each beneficiary who opts for a private plan than it would if they stayed in the traditional Medicare program, which reimburses providers at a set fee for a particular service. That difference increases the burden on taxpayers as well as beneficiaries, because participants pay higher monthly Medicare premiums.

The government economists say it's hardly a new trend that the health care sector will grow more quickly than the overall economy. Over the past 30 years, health spending has exceeded growth in the gross domestic product by about 2.7 percentage points each year. Over the coming decade, that difference is expected to narrow slightly. Still, the continued gap is worrisome, said the agency's acting administrator, Kerry Weems. He said consumers, particularly businesses, need more information about the quality and cost of care.

"We have an approaching crisis in this country unless we change the way we do business," Weems said.

Within the health sector, economists project that spending on hospital care will increase at rate of 6.9 percent a year over the coming decade, spending on physician services will rise 5.9 percent annually, and spending on nursing homes will grow 5.2 percent a year.

The economists' report will be published online by the journal Health Affairs.

[random_radar]

Health care costs would be a non-issue if we all paid for our own health care. The real issue is trying to force other people to pay for our health care.

Americans think they can steal from each other an live the good life. In the end, we all will have less than we could have had.

[tucano2]

Get rid of the Illegal Aliens sucking money from our healthcare "system" and most of the projected increase will disappear.

[jowand]

If the goverment takes over it will cost at least double this amount. These are the same idiots, both parties, that have fouled up SS.

[clifden6]

The take home message from Kerry Weems "We have an approaching crisis in this country unless we change the way we do business" is that the US economy can no longer afford the luxury of allowing the private sector to determine the cost of health care. If we can provide police protection, fire protection, library services, public schools and et al using tax revenues at affordable prices why not health care. It doesn''t really matter what you call it: socialism, communism, or whateverism, it boils down to pragmatism. Especially when the heads of the big 3 auto makers go to GWB complaining about health care costs, and the cost of attempting to compete in a world market with foreign competitors, who don''t have these health care costs. It is not a question of if, but when.

[standlee5]

Give us 100% medical tax deduction. Give us a catastrophic medical expense bailout. Give us tax credit for insurance premiums. Give us govt. loans to pay for medical costs. Give us frigging something. Those of us trying to pay for our own are getting buried. Then those who don''t try to pay get healthcare for free.

[ubrew12]

pierson98 said: "I cannot wait until The Great Baby-Boomer Die-Off begins. "
You''re why Bush felt comfortable doubling the national debt. By doing so, he touched off a battle between Boomers and their children. Either the children can pay for the boomers good times racking up a huge debt between 1980 and 2009, OR, the boomers can take suicide pills when the nation can no longer pay for their health care.

Either way, the rich, whom Bush has always represented, retire to other countries and watch amusedly while the little people flay themselves to death.

Tax the rich appropriately, and the problem solves itself. But, that would be unAmerican, so either Boomers die, or their children spend their whole life paying for their parents lifestyle. Frankly, if we''re so stupid as to take those choices, we deserve what Bush has done to this country. Judging from pierson98''s comments above, it sounds like are just that stupid!

[incog-nito]

There are few things less annoying than a cop on a power trip.

[pierson98]

Well, l8c6, you appear to have shut them up with that one. Good work.

[l8c6]

I cannot wait until The Great Baby-Boomer Die-Off begins. It can''''t start soon enough, as far as I''''m concerned.

Doesn''''t it ever embarass you all that you''''re such a drain on your nation and your planet? Don''''t you have any pride?

Posted by pierson98


Amen, in the 70s this group was known as the "me" generation and it never did change. The boomers are sell outs and the right wing boomers are absolute atrocities.

If they didn''t get stoned in their youth they certainly indulged in an economic orgy that stripped what was left of the soul of this country. Oh, but many of these p*igs will wear patriotic flag lapels on their suits.

Instead of ask not what your country can do for you, they asked what can I get out of this economy for me.

[l8c6]

If you like the medical care better somewhere else....go there. We like it here. That''''s the definition of freedom. Can you put your shoes on and leave. I suggest you do so and leave things as they are. Communism and socialism don''''t work. it''''s all a pipe dream. it looks good on paper but we''''ve got far too many free loaders here whom I refuse to pay for another welfare baby born with aids or crack habits.

Posted by maxify55

You are the epitome of the right wing. You fail to see it''s just not all about you. You and the way you like it doesn''t define america. Get over yourself. If you don''t like civilization, join the uni-bomber and live in the mountains. Other right wing crack pots who can''t cope have been doing this in Wyoming, Idaho and Montana for years. Of course, they are finding the elite whether right wing or not are putting pressure on their wild lands by privatizing huge tracts of land for mega summer estates. But it''s all good, it''s america.

[pierson98]

I cannot wait until The Great Baby-Boomer Die-Off begins. It can''t start soon enough, as far as I''m concerned.

Doesn''t it ever embarass you all that you''re such a drain on your nation and your planet? Don''t you have any pride?

[l8c6]

you whiny liberals on here arent going to change a thing. you failed at succeeding in life, how can you change anything in this country? coming on here and blaming bush for your failures in life isnt going to change a thing....sorry for the reality check

Posted by jwind11


How do you measure success?

[incog-nito]

jwind11: I''m doing very well thank you very much. I also like to choose a government to my liking. That''s what you call democracy.

[jwind11]

maxify55: Or we can change it to the way we want it. That''''s the American way.

Posted by incog-nito at 06:14 PM : Feb 26, 2008

you whiny liberals on here arent going to change a thing. you failed at succeeding in life, how can you change anything in this country? coming on here and blaming bush for your failures in life isnt going to change a thing....sorry for the reality check

[jwind11]

The government will take control of health care and save money by letting the old, weak, and undesirables die. That is the dirty secret of all socialized medical programs--genocide.

Posted by random_radar at 05:43 PM : Feb 26, 2008

bet they dont

[incog-nito]

maxify55: Or we can change it to the way we want it. That''s the American way.

[random_radar]

The government will take control of health care and save money by letting the old, weak, and undesirables die. That is the dirty secret of all socialized medical programs--genocide.

[fizzal-2009]

In Pennsylvania they want to dig up a golf course to build a hospital when there ia a 5 story hole in the ground 3 miles away where a quarry is and you don,t have to pay the i won,t work for you unless I get more for me excavator, that should help save health care costs.

[denn034]

Actually, it''ll probably cost more with the Democrats pursuing universal health care, the higher costs of Medicare and Medicaid, and if the gay lifestyle gets accepted by society with the dramatic increase of AIDS infections that''ll definitely follow.

[killtheliars]

I have an idea, lets make hospitals and doctors deny medical treatment to anyone who cannot prove they are a legal citizen. Since we spend billions on illegals this will be nice way to start. By the way, if you are here illagally and are sick, just call immigration, they''ll be happy to drive you home.