CBO Cuts Healthcare Spending Projections

A $160 billion net decrease from earlier projected federal healthcare spending estimates helped slow somewhat the federal government's expected accumulation of debt (PDF) over the coming decade, according to Congress' budget scorekeeper.

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Source: ModernHealthcare.com

The decrease comes despite projections that spending on Medicare and Medicaid providers will increase over the coming decade by $163 billion more than was previously expected, according to a revised outlook from the Congressional Budget Office. That increase over CBO projections released in March stemmed from lower expected productivity gains and higher costs in the healthcare sector. Specifically, the automatic provider updates, which are tied to changes in the prices of labor, goods and services in the healthcare sector and offset by expected productivity gains, were projected to increase by $136 billion, or about 2%, in Medicare and by $27 billion in Medicaid.