Federal spending on Medicare and Medicaid is expected to double by 2022, reaching $1.8 trillion or 7% of the entire economy, according to a new Congressional Budget Office report.
The CBO analysis paints a bleak picture about the aging population’s affect on federal health spending. Medicaid pays for the majority of U.S. nursing home care, with Medicare covering another significant slice.
“Under both CBO’s baseline and its alternative fiscal scenario, the aging of the population and rising costs for health care will push spending for Social Security, Medicare, Medicaid, and other federal healthcare programs considerably higher as a percentage of GDP,” the report states.
Additionally, it says that if that level of spending is paired with revenues that stick close to “the average share of GDP that they have represented for the past 40 years (rather than being allowed to increase, as under current law), the resulting deficits will increase federal debt to unsupportable levels.”
As a result, some lawmakers have targeted spending levels for programs that support long-term care and other healthcare providers, possibly setting up future showdowns with Congress.
Click here to read the full CBO report.