Healthcare Spending Projected to Accelerate as Population Ages

The Trump administration announced U.S. healthcare spending's growth is expected to ramp up in the next eight years as baby boomers age and the prices for medical services increase, states the Wall Street Journal . Reports from U.S. Centers for Medicare and Medicaid Services (CMS) actuaries are likely to up the pressure, making healthcare a key issue in the 2020 election. Healthcare's economic segment is projected to increase to 19.4 percent by 2027 from 17.9 percent in 2017, provided there are no legislative changes to the health system. "While Medicare spending is expected to accelerate the fastest among payers and contribute to the increase, growth in health prices and disposable personal income are also significant contributors," noted CMS economist Andrea Sisko. Spending is likely to expand due to new drugs on the market, more seniors requiring hospital care, and a burgeoning Medicaid populace that will drive demand for clinical services and doctors. Growth in personal healthcare spending is forecast to average 5.5 percent annually, with average growth in prices accounting for nearly 50 percent of this growth. Medicare spending growth is projected to average 7.4 percent in 2018-27 — the fastest rate among the major payers.