In this report, CBO has defined mandatory healthcare programs as those that do not require annual appropriations from Congress, including Medicare, Medicaid and CHIP.
The dramatic increase of healthcare spending in the long-term largely stems from the retirement of the baby boomer population as well as rising healthcare costs. According to CBO estimations, long-term per capita spending on healthcare per person will increase faster than spending per person on other goods and services.
Taking Social Security into account, CBO has projected that spending on major mandatory healthcare programs and Social Security will increase from approximately 10 percent of GDP to approximately 15 percent of GDP over the next 25 years. That 5 percent increase translates to a staggering $750 million increase in spending.
Comparatively, spending on all federal programs and activities, not including interest payments on debt, have hovered around 18.5 percent of GDP for the past 40 years.
Read the CBO 2011 Long-Term Budget Outlook here (pdf).
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