Federal outlays for the major healthcare programs rose significantly in this fiscal year, according to a new report updating this year's spending by the Congressional Budget Office.
The CBO projects that spending for the biggest healthcare programs--Medicare, Medicaid, Children's Health Insurance and health insurance subsidies--will rise a total of $87 billion in 2016, to $1.11 trillion. That compares to $1.03 trillion in 2015.
The biggest increase is in Medicare spending, which will rise to $696 billion this year, up from $634 billion in 2015. Medicaid spending rose a more modest $15 billion, to $365 billion.
Over the long term, spending on healthcare programs is expected to increase dramatically:
- Medicare spending will reach $1.29 trillion by 2026, nearly double the 2015 expenditures.
- Medicaid spending will reach $621 billion, up more 75 percent from 2015.
- Health insurance subsidies are also expected to rise significantly, from $43 billion this year to $103 billion by 2026. The CBO tied this in part not only to higher participation in the health insurance exchanges, but a significant number of Americans “as people adjust their employment circumstances in response” to maintain their income-based subsidies.
The long term spending projections for Medicare have not changed much in recent years. However, the CBO had recently expressed concerns about the growth of the Medicare program, which is being driven by the aging of the population – particularly the large number of Baby Boomers who will qualify for coverage over the next dozen-plus years. As a result, the CBO had suggested the government either cut program spending or raise taxes.
However, the CBO did make some downward spending revisions. Medicare spending is projected to be $38 billion lower over the next decade compared to the CBO's March spending report, primarily due to predicted higher labor productivity.
- here's the CBO report (.pdf)