Americans have not yet come to terms with the idea of not having social security cover and there are still quite a number of people who have not started taking retirement savings with the seriousness it deserves. Now, the U.S. Centers for Medicare and Medicaid Services has come out with news that could throw yet another bombshell on those who are ill prepared for the future. According to this government health agency, the cost of healthcare is likely to rise at a faster pace in the ten years ahead. It is no secret that healthcare costs are high even today and that they are rising year upon year but this news that the rate of rise may be higher still comes as a blow to many who have a limited nest egg saved up.
Two main factors for the faster rate of cost increase
The report has also highlighted that there are two key factors that will contribute to the faster pace of cost escalation in healthcare expenses. The first is that the baby boomer generation, which accounts for a huge segment of the American population, is aging now and they will be leveraging the healthcare facilities to the maximum in the coming ten years. The second reason is that the inflation is bound to have its effect on the costs and push them up too.
Facts and figures
To give you a clearer picture of what to expect in the coming decade, here are some numbers. In 2025, almost 20% of the economic activity will be attributable to health care related spending. In 2015, this figure was 17.8%. Across the U.S., the spending in this area is likely to witness an increase in 2017 to the tune of almost 5.5%. In 2016, the total spending here was $3.4 trillion.
The future of Obamacare will impact costs too
The estimation has been made with the view that the Affordable Care Act or Obamacare will continue to stay put. However, President Trump has indicated that he does not think much of the Act. He has, in fact, made his stance about repealing it very much known even during his election campaign. If the Act does go, and new one takes its place, there is little doubt that the whole equation about healthcare costs will change dramatically. Whether it will go further up or fall substantially depends on the actual policy that comes in.