While a surge of seniors heading into Medicare will have an impact on federal healthcare spending, its not the primary driver nor is it unexpected, the Congressional Budget Office reiterated in a new report released this week. Rather, higher healthcare costs per person remains the larger threat to Medicare and Medicaid, the CBO said.
Despite the substantial contribution of aging to federal spending on the two programs, most of the projected increase in spending stems from CBOs expectation that, as in the past, healthcare costs per beneficiary will continue to grow more quickly than per capita when compared to the gross domestic product, the CBO said.
While not a new assessmentCBO Director Peter Orszag made the case last year in an in-depth report on long-term healthcare coststhe report offers a number of spending models meant to illustrate its point. In each case, however, even as Medicare braces for growth, soaring healthcare costs remain the predominant threat, the CBO found.
No matter which technical assumptions are used, the projected growth of healthcare costs per beneficiary is by far the larger contributor to the growth of federal spending on Medicare and Medicaid, the report states. -- by Matthew DoBias
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