Cost of health care will continue to rise

WASHINGTON If only the economy were growing as fast.

Despite a recent easing of medical costs, the nations health care spending will keep outpacing economic growth for the foreseeable future, government experts said Tuesday in a forecast that signals more upheaval for Medicare and Medicaid, as well as private insurance.

President Barack Obamas health care overhaul will add $478 billion in spending over the 2011-2021 period covered by the projections, expanding coverage to some 30 million uninsured people. But the issue of rising costs will not go away even if the Supreme Court overturns Obamas law or his Republican foes ultimately succeed in repealing it.

By the beginning of the next decade, health care spending will be growing roughly 2 percentage points faster than the overall economy, which is about the same differential experienced over the past 30 years, said the report from Medicares nonpartisan Office of the Actuary.

The findings have implications for both sides of the political divide. If health care spending isnt brought in line with overall economic growth, Americans will eventually face agonizing choices between paying medical bills and funding other priorities such as education and infrastructure.

By 2021, health care will account for nearly 20 percent of the U.S. economy, the report found, up from under 14 percent in 2000. Controlling costs is one of the keys to solving federal budget woes, but that probably cant be done without major changes to Medicare and Medicaid.

The annual spending projections usually attract little attention. But with health care a central theme both of the nations polarized political debate and the federal budget, the report is now getting close scrutiny.

This year the biggest looming question has been whether fledging payment revisions in Obamas law, also mirrored by private insurance plans, are succeeding in holding costs down. The rate of growth the past three years has hovered under 4 percent, historically low. Thats coincided with a shift to paying hospitals and doctors for better quality, not just their sheer volume of tests and procedures.

Obama has argued that his overhaul would begin to bend the cost curve to more affordable levels.

The analysts remained skeptical.

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Cost of health care will continue to rise

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