CBO: Healthcare to soar to about 10% of GDP spending

If current laws remain, healthcare spending will make up 9 percent of the total gross domestic product (GDP) in 2035, up from the current 5.6 percent, toppling record-breaking debt the government has seen (and felt) since WWII, according to the "2011 Long-Term Budget Outlook" report by the Congressional Budget Office (CBO) released this week.

"...[T]he budget outlook, for both the coming decade and beyond, is daunting," the reports states. "...Moreover, per capita spending for health care is likely to continue rising faster than spending per person on other goods and services for many years (although the magnitude of that gap is very uncertain). Without significant changes in government policy, those factors will boost federal outlays sharply relative to GDP in coming decades under any plausible assumptions about future trends in the economy, demographics, and health care costs."

By 2035, Medicare would account for 6 percent of the GDP, and another 3 percent would come from Medicaid and CHIP.

To compare, in 1960, healthcare services and supplies accounted for only 4.8 percent of the GDP. In 2009, it made up 16.5 percent of the GDP, according to the report. In 2009, the most recent data available, healthcare spending in the U.S. amounted to $2.3 trillion. The breakdown of the distribution of healthcare spending is the following:

Healthcare services/supplies

Healthcare spending in 2009

Private health insurance




Medicaid and CHIP


Consumers' out-of-pocket expenses


Other public spending


Other private spending


The CBO urges policymakers to increase revenues and decrease spending to keep debt from climbing to unsustainable levels.

To learn more
- read the executive summary report (.pdf)
- read the full report (.pdf)
- check out data (.xls)
- visit the CBO budget webpage

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