CBNNews.com - If you think your medical bills are high now, just wait.
According to a new report, the U.S. government predicts health care spending will double in the next ten years. Government spending on health care will also grow dramatically as baby boomers become eligible for Medicare.
Health care in the U.S. is big business. Last year, Americans spent $2.2 trillion on healthcare. But the government forecasts that if the system stays the same that number will rise to $4.3 trillion by the year 2117. A figure like this means will one out of every five dollars the nation spends will be spent on health care.
So why are costs rising?
Economists with the centers for Medicare and Medicaid say it is due to an aging population combined with the rising cost of producing new drugs and technology.
The study also sheds some light on just who will be paying. Private spending is projected to grow at a slower pace as the government picks up a larger share of the tab.
"Health is projected to consume an expanding share of the economy, which means that policymakers, insurers and the public will face increasingly difficult decisions about the way health care is delivered and paid for," CMS economists said.
Sean Keehan, one of the study's authors, says "The impact of the population aging is expected to have a substantial influence on the public share of spending growth, as the leading edge of the baby-boom generation becomes eligible for Medicare."
With the first wave of boomers enrolling in 2011, Medicare is forecast to make up 21 percent of the nation's health bill.
President Bush has proposed slowing Medicare spending by reducing payments to health care providers, but Democrats oppose that idea.
They favor trimming payments to private insurers.
One thing's for certain, "on its current course," according to Health and Human Services Secretary Mike Leavitt, "Medicare is not sustainable."
Some of the other forecasts predict:
-- Hospital costs to nearly double to $1.3 trillion - the largest share of health care spending.
-- Medicaid will rise on average of nearly 8 percent per year.
-- Prescription drugs will cost Americans twice as much as they do now, rising to $515 billion.
A growing number of the nation's elderly and disabled are electing to get health coverage through private plans that contract with the federal government. Government economists predicted that trend will continue. Now, about one in six beneficiaries get their health benefits through a private plan. By 2017, more than one in four beneficiaries will get their coverage that way, Medicare officials said.
Health experts tell Congress that Medicare pays much more for each beneficiary who opts for a private plan than it would if they stayed in the traditional Medicare program, which reimburses providers at a set fee for a particular service. That difference increases the burden on taxpayers as well as beneficiaries, because participants pay higher monthly Medicare premiums.
The government economists say it's hardly a new trend that the health care sector will grow more quickly than the overall economy. Over the past 30 years, health spending has exceeded growth in the gross domestic product by about 2.7 percentage points each year. Over the coming decade, that difference is expected to narrow slightly. Still, the continued gap is worrisome, said the agency's acting administrator, Kerry Weems. He said consumers, particularly businesses, need more information about the quality and cost of care.
"We have an approaching crisis in this country unless we change the way we do business," Weems said.
Within the health sector, economists project that spending on hospital care will increase at rate of 6.9 percent a year over the coming decade, spending on physician services will rise 5.9 percent annually, and spending on nursing homes will grow 5.2 percent a year.
The economists' report will be published online by the journal Health Affairs.
Unless changes are made, American consumers may end up paying more out of their own pockets to pay for treatment - either through higher taxes, higher costs or both.
Source: Associated Press