According to a study recently conducted by the Congressional Budget Office (CBO), “healthcare spending has grown at a historically slow rate.” For some time now, economists have been predicting healthcare spending to grow as the baby boomer generation begins to retire. In the CBO’s “annual 25-year forecast of the federal budget, the CBO projected growth of federal spending on healthcare programs will continue to slow at a healthy rate over the next 25 years.” The majority of healthcare leaders agree that the passage of Affordable Care Act (ACA) is the main driver behind this change.
This new data changes everything. Major healthcare programs such as Medicaid and Medicare, were once believed to be headed towards insolvency. Now data suggests “that trust fund is expected to be solvent until at least 2030, according to the CBO.” Peter Orszag, a former Office of Management and Budget (OMB) director, considers this news “the equivalent of the ‘biggest fiscal development’ in more than three decades.”
Regardless of the projections, healthcare spending will likely become the Federal Government’s main expense by the year 2030. Baby boomers are already beginning to retire, and those numbers will only increase in coming years. It may still be too early to determine the future fiscal landscape, but physicians and doctors must continue to educate themselves and begin developing their financial strategies and positioning into the future.
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