By 2028,health care spending will account for 19.7 percent of the U.S.economy, up from 17.7 percent now. (Image: Shutterstock)

A recent study published in Health Affairs projects that healthcare spending will grow at an average annual rate of 5.4 percentover the next decade.

The analysis, which was authored by researchers atthe Centers for Medicare and Medicaid Services, was published onMarch 24, a week-and-a-half after President Trump declared anational emergency over the coronavirus. However, it does not takeinto account the impact that COVID-19 may have on health carespending over the next year or two.

The report projects that health spending would increase by 5.2percent in 2020, up from 4.5 percent in 2019 and 4.6 percent in2018.

Related: Top 1 percent of spenders account for 22 percent ofhealth care expenses

The major driver of the bump in spending will be the "rebound"in prices for medical services and goods, the authors predict.

Overall, the increase in prices will account for 43 percent ofthe spending growth in the coming decade, while "use and intensity"will make up about a third of the increase. Increased wages forhealth care workers will also drive spending up.

By 2028, health care spending will account for 19.7 percent ofthe U.S. economy, up from 17.7 percent now.

Medicare will experience a particularly high rate of spendinggrowth, averaging 7.6 percent per year over the decade as thecountry's over-65 population continues to grow.

Medicaid growth will be more modest: 5.5 percent. Privateinsurance will be lower still: 4.8 percent.

However, future Medicaid spending hinges on political dynamicsthat could easily change in the coming years. Among the 13 statesthat have yet to expand Medicaid are two of the biggest: Texas andFlorida. If new political leadership in those states changescourse, Medicaid spending will increase significantly.

Similarly, the analysis projection that overall health carecoverage will drop slightly, from 90.6 percent to 89.4 percent, isbased on the refusal of a number of states to expand Medicaid aswell as the current administration's opposition to the AffordableCare Act.

"As it has over the past several decades, health spending isexpected to grow, on average, more rapidly than the rest of theeconomy," writes lead author Sean Keehan, an economist in theOffice of the Actuary at CMS. "The government is projected to pay alarger share (nearly half) of the nation's total health bill by2028, as the baby boomers continue aging into Medicare and theprogram's beneficiaries consume $1 out of every $4 spent on healthcare. Policy makers and other stakeholders will undoubtedlycontinue to monitor these trends and their implications for thehealth sector, federal and state budgets, and the economy as awhole."

Read more: 

• Health care spending continues to rise, despitecost-saving strategies
• Over half of your Social Security will go to healthcare costs–and it's going to get worse
• States taking action to curb provider consolidationand price increases