CMS Projects Health Expenditures to Reach $6 Trillion by 2027
Health care remains a top domestic policy issue for Americans. Across the board—regardless of political ideology—Americans are concerned about the quality of health care, access to providers, and rising costs associated with medications and treatment.
In February 2019, the Centers for Medicare and Medicaid Services’ (CMS) Office of the Actuary released a report outlining (https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/NationalHealthExpendData/Downloads/ForecastSummary.pdf) the projected growth in national health spending from 2018–2027.
According to the CMS report, health spending is expected to increase at a rate of 5.5% per year through 2027 (https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/NationalHealthExpendData/Downloads/ForecastSummary.pdf), reaching a total of $6 trillion. Citing increased health insurance enrollment numbers, expanded Medicare services, Medicaid payments, growing out-of-pocket fees, high-cost prescription drugs, hospital costs, and physician services, the report outlined several aspects that influence the growth rate.
The CMS report also detailed factors affecting federal entitlement programs. In particular, Medicare spending is expected to exceed expenditures for both Medicaid and private health insurance through 2027 because of comparatively higher estimated enrollment numbers. Likely, through the next 20 years, a large influx of baby boomers will retire and enroll in Medicare services, rapidly increasing the numbers and level of spending.
The percentage of insured Americans is estimated to remain stable through 2027 at approximately 90% of the population. The report also estimated that health spending will likely increase faster the U.S.’s gross domestic product (GDP) through the 19-year period and will ultimately account for more than 19% of the country’s total GDP by 2027.