On January 26, the Congressional Budget Office (CBO) released a report estimating that federal health program spending will increase from $810 billion in 2010 to $1.8 trillion in 2021.  In addition, the CBO projects that health spending as a proportion of gross domestic product (GDP) will grow from 5.8 percent in 2011 to 7.4 percent in 2021.  The report also estimates that Medicare costs could increase up to $250 billion through 2021 if Congress continues to approve temporary adjustments to Medicare’s physician reimbursement rate.  Finally, the CBO projects that 97 million individuals will be enrolled in Medicaid by 2021, with enrollment accelerating because of the national health care reform law.

From the report:

This volume is one of a series of reports on the state of the budget and the economy that the Congressional Budget Office (CBO) issues each year. It satisfies the requirement of section 202(e) of the Congressional Budget and Impoundment Control Act of 1974 that CBO submit to the Committees on the Budget periodic reports about fiscal policy and its baseline projections of the federal budget. In accordance with CBO’’s mandate to provide objective, impartial analysis, the report makes no recommendations. The baseline spending projections were prepared by the staff of CBO’’s Budget Analysis Division under the supervision of Peter Fontaine, Theresa Gullo, Holly Harvey, Janet Airis, Tom Bradley, Kim Cawley, Jean Hearne, Jeffrey Holland, Sarah Jennings, Leo Lex, and Sam Papenfuss——with important contributions from the staff of the Health and Human Resources Division (supervised by Bruce Vavrichek, James Baumgardner, and Philip Ellis) and the Financial Analysis Division (supervised by Deborah Lucas and Damien Moore). The revenue estimates were prepared by the staff of the Tax Analysis Division under the supervision of Frank Sammartino, David Weiner, Mark Booth, and Janet Holtzblatt, with assistance from the staff of the Joint Committee on Taxation. The economic outlook was prepared by CBO’s Macroeconomic Analysis Division under the direction of Robert Dennis and Kim Kowalewski; Robert Arnold and Christopher Williams produced the economic forecast and projections. Altogether, this report is the result of work by more than 100 people at CBO——too many, unfortunately, to acknowledge in this preface. The analysts who developed the projections presented in this report are listed in Appendix F.

Full Report: The Budget and Economic Outlook: Fiscal Years 2011 to 2021 (PDF | 2.37 KB)

Congressional Budget Office. (2011). The budget and economic outlook: fiscal years 2011 to 2021.