Healthcare spending is projected to reach nearly $4.6 trillion by 2019, growing at an average annual rate of 6.3 percent over the next decade, according to economists at the Centers for Medicare and Medicaid Services.
By 2019, healthcare is projected to account for nearly one of every five U.S. dollars spent, or about 19.6 percent of the gross domestic product, 0.3 percentage points higher than anticipated before healthcare reform.
The projections were published Thursday in Health Affairs and update a Feb. 4 national health spending report.
According to Andrea Sisko, lead author of the study and an economist at CMS, the Affordable Care Act will have a moderate effect on healthcare spending growth rates and the healthcare share of the economy.
The report estimates that spending in 2010 is projected to reach $2.6 trillion and account for 17.5 percent of the GDP, up 0.2 percent from pre-reform estimates. The growth is driven in large part by the postponement of cuts to Medicare physician payments and legislative changes to COBRA premium subsidies, study authors said.
In 2011, public and private health spending is expected to grow more slowly as reductions in Medicare physician payment rates – including a 23-percent reduction in December of 2010 – come into effect and COBRA premium subsidies expire, according to the report.
Health spending is projected to rise significantly in 2014, when health coverage is expanded to millions of uninsured Americans. Expanded coverage means overall spending is expected to increase by 9.2 percent, significantly higher than the 6.6 percent rate put forward in February, CMS researchers said.
Public spending is projected to increase by 9.7 percent in 2014, while private spending is anticipated to increase by 8.6 percent and the cost of the federal government's administrative function for healthcare reform is projected to cost $2.4 billion between 2010 through 2019, they said.