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CMS: Medicaid spending surges in 2014; Medicare awaits 2020

September 3, 2014
by Pamela Tabar, Editor-in-Chief
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Health spending predictions remain close to last year’s estimates, increasing to six percent by 2015 and remain so through 2023, according to a new study released today by the Centers for Medicare & Medicaid Services Office of the Actuary.

As expected, the additional coverages under the Affordable Care Act (ACA) and a rising aging population are credited for the increases. Although Medicaid spending is expected to have surged by 12.8 percent in 2014 because of coverage expansions, the study projects a drop to 6.7 percent in 2015. Medicare spending is expected to peak in 2020 at 7.9 percent growth because of baby boomer enrollment, the report notes.

"Analysis of historical trends tells us that healthcare spending tracks with economic growth, so as the economy is anticipated to improve over the next decade, health spending growth is projected to grow faster," says Andrea Sisko, the lead author for the study. "This, in addition to the baby boomers aging and increased insurance coverage mandated by ACA is expected to result in the health share of [gross domestic product] rising to nearly one-fifth of the nation's economy by 2023."

The new findings are published in Health Affairs.