Dive Brief:
- The Congressional Budget Office is now predicting that spending on large government healthcare programs such as Medicare and Medicaid will go down by $1.23 trillion over the 10 years starting in 2010.
- The CBO also predicted that government healthcare spending will fall by one-tenth of a percentage point within 25 years, to 8% of the gross domestic product. By 2039, savings would add up to $250 billion a year today.
- While multiple factors seem to be contributing to the change, one key finding was that the federal government might be able to hold down the growth rate of provider payments by following requirements set forth in the ACA.
Dive Insight:
While the CBO has offered good news, there are countervailing trends adding to healthcare expenses. For example, federal healthcare spending should still grow more quickly than any other budget category as baby boomers become eligible for Medicare, the agency notes. By 2030, healthcare should be the government's biggest expense.
What's more, the agency notes that there are many variables that could impact the accuracy of these projections, including changes in the growth rate of the economy, the threat of deep recessions and world events that lead to political and economic upheaval. For now, however, it appears that the ACA may have a positive impact on healthcare costs.