APPENDIX D

Projected Health Care Spending When
Excess Cost Growth Is Assumed to
Continue at Historical Averages

This appendix presents projections of health care spending under the assumption that the excess cost growth rates for spending on Medicare, Medicaid, and all other health care continue indefinitely at their average values from 1975 to 2005: 2.4 percentage points for Medicare, 2.2 percentage points for Medicaid, and 2.0 percentage points for other health care. Under that assumption, federal spending on Medicare and Medicaid would reach 8 percent of gross domestic product (GDP) by 2030, 14 percent of GDP by 2050, and 31 percent of GDP by 2082 (see Figure D-1). Total national spending on health care would reach 29 percent of GDP by 2030, 48 percent of GDP by 2050, and 99 percent of GDP by 2082.

Figure D-1. 

Projected Spending on Health Care Under an Assumption That Excess Cost Growth Continues at Historical Averages

(Percentage of gross domestic product)

 

Source: Congressional Budget Office.

Notes: Excess cost growth refers to the number of percentage points by which the growth of spending on Medicare, Medicaid, or health care generally (per beneficiary or per capita) is assumed to exceed the growth of nominal gross domestic product (per capita).

Amounts for Medicare are net of beneficiaries' premiums. Amounts for Medicaid are federal spending only.