The nation’s respite from troublesome healthcare inflation is ending, the government said Wednesday in a report that renews a crucial budget challenge for lawmakers, taxpayers, businesses and patients.
Economic recovery, an aging society, and more people insured under the new healthcare law are driving the long-term trend.
Projections by nonpartisan experts with the Health and Human Services department indicate the pace of healthcare spending will pick up starting this year and beyond. The introduction of expensive new drugs for the liver-wasting disease hepatitis C also contributes to the speed-up in the short run.
The report from the Office of the Actuary projects that spending will grow by an average of 6 percent a year from 2015 to 2023. That’s a notable acceleration after five consecutive years, through 2013, of annual growth below 4 percent.
Although the coming bout of health-cost inflation is not expected to be as aggressive as in the 1980s and 1990s, it will still pose a dilemma for President Barack Obama’s successor. Long term, much of the growth comes from Medicare and Medicaid, two giant government programs now covering more than 100 million people.
The United States is expected to spend more than $3 trillion on healthcare this year, far above any other economically advanced country. Yet Americans are not appreciably healthier, and much what they spend appears to go for tests and treatments of questionable value. Fraud also siphons off tens of billions of dollars a year.