Congressional Budget Office Report
The CBO also acknowledged in the Report that the Federal budget deficit is expected to grow to $544 billion in 2016 from $439 billion in 2015. This $105 billion increase will be the first rise in deficit since the end of the financial crisis of 2009, which was followed by 6 years of decline.
The Report includes various facts regarding the budget and economic outlook as they relate to the healthcare industry including, but not limited to, the following:
- In 2015, Federal spending for major healthcare programs including Medicare, Medicaid, the Children’s Health Insurance Program, and subsidies offered through health insurance marketplaces and related spending exceeded Social Security outlays for the first time. In total, such spending amounted to $936 billion, an increase of $105 billion or approximately 13 percent.
- Medicaid spending grew by $48 billion, or sixteen percent, during 2015.
- Subsidies for health insurance purchased through health insurance marketplaces increased by $23 billion in 2015 to approximately $38 billion.
- Medicare spending in 2015, net of premiums and other offsetting receipts, increased by $34 billion, nearly 7 percent. This is the fastest rate of growth recorded for the program since 2009. This increase also reflects the expansion of approximately 3 percent in the number of Medicare beneficiaries and an escalation in the number or cost of services furnished to those beneficiaries, particularly under Part D (which covers outpatient prescription drugs).
- The CBO’s baseline projections, which incorporate the assumption that current laws will generally remain the same, estimate that growth in spending, particularly for Social Security, healthcare, and interest payments on Federal debt, will outpace growth in revenues over the coming ten years.
- Medicaid spending is expected to increase by $31 billion, or 8.8 percent, in 2016. This projected rate of growth is a little over half the average rate of growth recorded over the two previous years; primarily because the optional expansion of coverage authorized by the Affordable Care Act will have been in place for two years.
- Federal spending for the major healthcare programs outlined earlier accounts for more than 60 percent of the projected growth in mandatory spending. Projected outlays for Medicare, net of premiums and other offsetting receipts, Medicaid, and the Children’s Health Insurance Program, plus subsidies for health insurance purchased through health insurance marketplaces and related spending, are expected to be $104 billion, or 11 percent higher this year than they were in 2015.
- Changes that the CBO has made to its estimates since August have increased the projection of the cumulative deficit for the 2016 to 2025 period by $363 billion. The most significant adjustment to outlays involves Medicaid and veterans’ benefits. The CBO boosted its projections of Federal outlays for Medicaid to reflect higher than expected spending and enrollment for newly eligible beneficiaries under the Affordable Care Act.
Conclusion
The Report provides detailed insight as to the projected government deficit for the coming decade. As the deficit relates to healthcare spending it is anticipated that Federal spending for healthcare will continue to increase due to the number of individuals receiving benefits from government programs.
A copy of the Report can be accessed at the following link:
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The information contained herein is not necessarily all inclusive, does not constitute legal or any other advice, and should not be relied upon without first consulting with appropriate qualified professionals for your individual facts and circumstances.
