Aging population will double health spending in the next decade

In the next decade, the number of people 65 and older will increase by one third.  According to the Congressional Budget Office (CBO)'s Budget and Economic Outlook for 2012-2022, "the aging of the population and rising costs for health care will continue to exert significant pressure on the federal budget."  This pressure will lead to an increase in outlays for Medicare, Medicaid and other mandatory health care programs from $856 billion in 2011 to $1.8 trillion in 2022.  This projected increase assumes a 27% physician paycut, taking effect in March, although the outlook also outlines an "alternative fiscal scenario" in which physician pay rates are frozen at 2011 levels, resulting in an additional $316 billion in mandatory health care spending.

The CBO states that "the set of budget policies that were in effect in the past cannot be maintained in the future," and suggests that "to keep deficits and debt from causing substantial harm to the economy, policymakers will need to ... make major changes to Social Security and federal health care programs."

For more information and analysis, see the CBO's summary and the Wall Street Journal's summary.

Update, 2/6/2012: According to the AMA, the House GOP Doctors Caucus may be reconsidering reallocating funds originally earmarked for troops in Afghanistan and Iraq in order to avoid physician paycuts.  The AMA supports this strategy, and calls for congressional support for it in a Jan. 23rd press release.