Medicaid Costs Projected To Grow by 7.9% Annually, According to CMS Report

The CMS Office of the Actuary on Friday projected that state and federal spending on Medicaid will total about $339 billion in 2008 and will rise at a rate of 7.9% annually to $674 billion by 2017, CQ HealthBeat reports. According to the report, Medicaid spending growth is expected to increase at a faster rate over the next decade than the economy in general, which is expected to increase by 4.8% annually, and health care spending in general, which is expected to rise by 6.7% annually. The report found that in 2017, Medicaid will comprise 3% of the gross domestic product, and Medicaid and Medicare combined will make up 6.9% of GDP. Medicare spending is expected to increase by about 7.4% annually through 2017, according to CMS.

The report forecast that Medicaid enrollment will grow by 1.8% to 50 million this year. Over the next 10 years, enrollment is projected to grow by 1.2% annually to 55.1 million in 2017, according to CMS.

HHS Secretary Mike Leavitt said, "If nothing is done to rein in these costs, access to health care for the nation's most vulnerable citizens could be threatened" (Reichard, CQ HealthBeat, 10/17).

CMS each year informs the public about the financial status of Medicare and Social Security, including trends and predictions, but the report released on Friday is the first to project Medicaid spending growth, the AP/San Francisco Chronicle reports. CMS said the Medicaid report now will be conducted annually (Freking, AP/San Francisco Chronicle, 10/17).

The report is available online.