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ChartWatch: US government's share of healthcare spending to grow

U.S. healthcare spending is expected to continue increasing over the next eight years, with the government's share growing at a greater rate than that of the private sector, according to projections by the Centers for Medicare and Medicaid Services' Office of the Actuary on Feb. 14.

As more aging Baby Boomers move from private health plans to Medicare, the government insurance program for people 65 and over, enrollment will surge over the 2017-2026 period, the agency estimated. Medicare spending is expected to grow by an average of 7.4% a year.

Medicaid, the federal-state insurance program for low-income people, will also see an increase in enrollment, with spending climbing 5.8% a year on average.

As a result, federal, state and local governments are expected to pay 47% of the nation's healthcare costs by 2026, up from 45% in 2016. Businesses, households and other private sources are expected to pay a smaller share, 53% by 2026, down from 55% in 2016.

The healthcare market in the U.S. is ripe for disruption from a new entrant — especially Amazon.com Inc. — due to steep costs, growing consumerism, lack of transparency as well as strong regulatory oversight, S&P Global Ratings said in a Feb. 15 report.

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