Published July 28 in Health Affairs, the Centers for Medicare & Medicaid Services’ Office of the Actuary released a report, finding that health care spending will grow an average of 5.8 percent annually through 2020.  The report estimates the increasing growth rate will drive the U.S. to spend $4.6 trillion on health care in 2020, up from $2.6 trillion in 2010 and accounting for nearly 20 percent of the U.S. economy.  The report predicts that the growth rate will increase to 8.3 when health reform’s coverage expansion takes effect in 2014, returning to 6.2 percent between 2015 and 2020.  However, despite the rising growth rate, the report predicts the average yearly health care cost growth will increase only .1 percent more than it would without health care reform.  The authors also estimate the effects of health reform on health care payers, noting that federal, state, and local government spending will increase 4 percent to account for 49 percent of all spending in 2020, while employers’ share declines to 18 percent.  The report notes that federal spending will drive the shift towards public payers, with the federal share of health care spending increasing from 27 percent in 2009 to 31 percent in 2020.  Finally, the report estimates that the number of Americans with employer-sponsored insurance will reach 170 million in 2014 but decline to 168 million by 2020.

Keehan, Sean P., Sisko, Andrea M., Truffer, Christopher J., et. al. (2011). National health spending projections through 2020: economic recovery and reform drive faster spending growth. Health Affairs. doi: 10.1377/hlthaff.2011.0662. http://content.healthaffairs.org/content/early/2011/07/27/hlthaff.2011.0662.abstract 

Authors: Sean P. Keehan, Andrea M. Sisko, Christopher J. Truffer, John A. Poisal, Gigi A. Cuckler, Andrew J. Madison, Joseph M. Lizonitz, and Sheila D. Smith.