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Samantha Sears

Behavioral Health Policy and Practice Intern

CBO Releases Economic Outlook, Future Health Care Spending Report

April 19, 2018 | Federal Budget | Medicaid | Medicare | Comments
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The Congressional Budget Office (CBO) projects the country’s annual budget deficit will reach $1 trillion by 2020 in a new report released this week. The annual report was delayed this year to incorporate analysis on the impact of the Tax Cuts and Jobs Act passed in late 2017. The report highlights not only growing deficits but also growing health care spending for programs like Medicare, Medicaid and social safety net programs.


CBO projects that spending on federal health care programs will increase at an average rate of 6 percent each year, reaching $2 trillion by 2028. For Medicaid, growth at an average rate of about 5 percent is expected over the next decade while Medicare is expected to grow by 7 percent. Rising per-beneficiary costs of medical care are the driving factor to this growth. By 2028, projected federal spending for Medicaid will grow to more than $650 billion and Medicare will grow to $1.5 trillion.


Spending for health insurance subsidies are estimated to increase by $10 billion in 2018 with an average increase of 34 percent in premiums for “silver plan” health insurance plans. These subsidies are offered to help low-income consumers purchase health plans on the individual marketplace. CBO estimates that, under current law, expenditures for health insurance subsidies would rise by about 60 percent over the next decade.


Despite this grim outlook of growing health care costs and federal budget deficits, Congress recently passed an omnibus budget bill that appropriated billions of new dollars to health care programs, including more than $3 billion in new funding to address opioid addiction. As Congress continues its work on Fiscal Year 2019 appropriations, advocates must continue to drum up support for needed programs within the Substance Abuse and Mental Health Services Administration (SAMHSA) and larger Health and Human Service budget.

Stay tuned to Capitol Connector for more on the FY2019 appropriations process and how you can get involved!