As baby boomers emerge into the Medicare system, healthcare spending will double in the U.S. and shift from the private to the public sector by 2017, reaching $4.3 trillion and accounting for one-fifth of the gross domestic product, a new government report shows.
U.S. citizens may need to prepare themselves by saving and budgeting for 2017 because Medicare spending is expected to account for $884 billion instead of the spending level of $427 billion for 2007.
"Our expectation is that growth in health spending is expected to be steady over the projection, which is 2007 through 2017, at 6.7 percent per year," said report co-author Andrea Sisko, an economist with the Centers for Medicare and Medicaid Services, during a teleconference Monday.
"At the same time, we are expecting economic growth to slow to an average annual rate of 4.7 percent. As a result, the combination of steady health spending growth and slowing economic growth will lead to the health care part of gross domestic product rising to nearly 20 percent by 2017, nearly one-fifth of the economy," Sisko said.
Health care spending grew to more than $2.1 trillion in 2006, accounting for 16 percent of gross domestic product, which will only grow as the years pass on.
Hospital spending is expected to increase and gradually slow down through 2017, prescription drug spending is expected to slow down initially and then start to accelerate through 2017, and drug spending will increase, while Medicaid is projected to grow to $717.3 billion over the next 10 years.
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