* Health spending to grow 5.8 pct annually - report
* New healthcare law adds incrementally to growth - report
(Adds government spending)
By Andrew Seaman
WASHINGTON, July 28 U.S. health costs will
account for 19.8 percent of the nation's spending by 2020, up
from 17.6 percent in 2009, with the government paying a bigger
portion of the bill, researchers said on Thursday.
The report, published online in the journal Health Affairs,
looked at projected U.S. health spending through 2020. The
researchers estimated the government's share of health spending
will increase from 45 percent today to 49 percent by 2020.
The increase is partly due to a percentage of the 30
million people gaining health insurance through President
Barack Obama's healthcare overhaul joining government
According to the report, the average annual growth in
national health spending is expected to be 5.8 percent, or 0.1
percentage point higher than it would be without the Affordable
Care Act, outpacing annual GDP growth.
"We are projecting a decline in the out-of-pocket share
[for consumers], but that doesn't mean that the consumer's
burden is going to be substantially reduced," said Sean Keehan,
an economist at the government's Centers for Medicare and
Medicaid Services (CMS) and co-author of the report.
"Especially since we're projecting health spending to grow at a
faster rate than economic growth and disposable personal
For 2010, the researchers estimated health spending grew at
a historically low rate of 3.9 percent to $2.6 trillion. They
attributed this to a weak economy that has led many consumers
to delay medical treatment.
Future spending will likely grow at a faster pace,
fueling concerns over how to cut the country's deficit, now the
subject of fierce debate among lawmakers ahead of a deadline
for raising the government's borrowing limit. [ID:nN1E76P2HJ]
The largest increase in healthcare spending in a single
year is expected in 2014, when CMS forecasts a rise of 8.3
percent as much of the new U.S. health law is implemented. The
law's provisions include introducing state-based insurance
exchanges and increased access to the government's Medicaid
insurance plan for the poor.
The report estimated spending growth will average 6.2
percent annually from 2015 through 2020.
According to the report, some large employers with low-wage
employees are expected to stop offering health insurance in
2014. An estimated 13 million employees will then likely seek
insurance in the new exchanges or by enrolling in Medicaid,
according to Rick Foster, CMS's chief actuary.
Increased access to health insurance is another explanation
for the high growth rate, because with access comes demand.
The researchers estimated that doctor visits, clinical
services and prescription drugs will be some of the largest
growth areas, because of the comparably young age of the newly
insured population. The report said younger patients tend to
require less acute care.
(Reporting by Andrew Seaman; editing by Michele Gershberg,
Steve Orlofsky and John Wallace)