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CMS: Medicaid Spending to Hit $674 Billion by 2017

By John Reichard, CQ HealthBeat Editor

October 17, 2008 -- In the first of what it said will be an annual report projecting Medicaid outlays, the respected Office of the Actuary at the Centers for Medicare and Medicaid Services (CMS) said Friday that combined federal and state spending on the health care program for the poor and disabled will reach $339 billion in 2008. Spending on the program will grow at a 7.9 percent yearly clip over the next decade, reaching $674 billion by 2017.

CMS noted that that's a considerably faster rate of growth than for the economy generally, which is expected to grow at a yearly rate of 4.8 percent over the next decade.

"If nothing is done to rein in these costs, access to health care for the nation's most vulnerable citizens could be threatened," HHS Secretary Michael O. Leavitt said in a news release commenting on the report.

The Medicaid spending growth rate will slightly exceed that for overall health care expenditures, which CMS actuaries and economists say will rise 6.7 percent per year over the next 10 years.

CMS said that Medicare spending will grow 7.4 percent per year through 2017. Medicaid will account for 3 percent of GDP in 2017 and Medicare and Medicaid together 6.9 percent.

The report also projected that Medicaid enrollment will rise 1.8 percent to 50 million this year. Over the next 10 years, enrollment will grow 1.2 percent yearly, reaching 55.1 million by 2017. In 2007, per enrollee spending on non-disabled children covered by Medicaid averaged $2,435 and $3,586 for non-disabled adults. Medicaid's per enrollee spending for the disabled averaged $14,858 and $14, 058 in the case of aged beneficiaries.

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