Health costs will keep rising

The government released new projections for healthcare spending today. As expected, analysts are forecasting that spending will continue to rise sharply over the next ten years as an aging American population grows increasingly reliant on expensive medical technologies and therapies. By 2015, one in five dollars will be spent on healthcare as spending rises from 16 percent of GNP to 20 percent. Overall Medicare spending is expected to more than double, from $309 billion this year to $792 billion in 2015. Medicaid spending will grow from $293 billion to $670 billion over the same period. The overall spending growth estimate is 7.2 percent annually.

Talking Points: While spending projections are always a controversial topic in Washington, this year's estimates may be a little more controversial than usual. Some critics question the thinking behind the numbers, wondering if it is realistic to assume that spending on prescription drugs will slow, particularly given the problems experienced by Medicare Part D.

PLUS: One key factor driving costs, according to today's CMS report, will be a continued boom in hospital spending.

- read this article from The New York Times
- see the Health Affairs release