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Medicare spending projected to climb 7 percent annually after this year, says Congressional Budget Office

The CBO's report follows similar projections that the Centers for Medicare and Medicaid Services laid out earlier this year.

Jeff Lagasse, Associate Editor

Medicare spending is projected to to grow 7 percent per year after 2018, swelling to about $1.2 trillion by 2028, according to a new economic report from the Congressional Budget Office.

This year, the spending growth is expected to be comparatively slow at 3 percent, due largely to higher revenue from premiums. Medicare enrollment is also expected to increase by 2.7 percent, a slight uptick from the 2.6 percent increase in 2017.

That slow growth may well be the calm before the storm. Due to what the CBO called the "rising per-beneficiary costs of medical care," cost growth will account for 5 percent of the spending increase and hit at least 7 percent from 2019 to 2028.

CBO anticipated Medicaid costs will rise as well, though not as much. Due mostly to growing per-capita costs, spending on Medicaid is projected to grow 5.5 percent during that same timeframe.

Similar numbers were released earlier this year from the Office of the Actuary at the Centers for Medicare and Medicaid Services. Fueled by both economic and demographic factors, such as changes in projected income growth and swelling Medicare, national health spending overall is expected to grow at a rate of 5.5 percent for 2017–26, outpacing projected growth in gross domestic product by one percent.

Twitter: @JELagasse
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