Healthcare costs are a major driver of the US national debt

Congressional Budget Office (CBO) projections show that the national debt is unsustainable, Peter G Peterson Foundation reports. According to current law, the nation’s debt will reach 185 percent of GDP in 2052, up from nearly 100 percent in 2021. Major healthcare programs, such as Medicare and Medicaid, are a major contributor to that rising debt. The federal government expects such spending to rise by 68 percent over the next decade and surpass all other categories of spending by 2030. Spending on such programs will exceed spending on discretionary programs, such as defense and education, by nearly 50 percent by 2052.

In general, two factors influence how much the federal government spends on major healthcare programs:

  1. Healthcare expenditures are increasing among the elderly, according to the changing demographics of the population. The federal government spends more on programs like Medicare as more people reach retirement age.
  2. Additional cost growth: When healthcare costs outpace the growth rate of the economy after adjusting for demographic changes. As a result of such cost growth, the federal government will have to spend more on healthcare programs.

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