On February 26, the Center for Medicare and Medicaid Studies released its report of “Health Spending Projections Through 2017:  The Baby-Boom Generation Is Coming to Medicare” that showed that home health care spending is projected to grow by 9.2% in 2007.  The study projects that home health is expected to grow approximately 7.7% per year.  According to the study, Medicare and Medicaid are expected to account for the rapid increase as the public share of home health care is expected to rise from 75% in 2006 to 84% in 2017.

Spending growth on nursing home care is expected to increase 5.3 % annually through 2017 and medicaid is expected to remain the largest payer accounting for about 43% of all such care through 2017.  Even considering these growth factors, the impact of the baby-boomer generation on nursing home spending is likely to be small during the projection period as the use of nursing homes is highest for people age 85 or older because the oldest baby-boomers in 2017 will be 71 years old.

Looking at these projected increases in the costs for nursing homes and the increases that Medicaid and Medicare are expected to pick up, which one of the presidential candidates can address these rising health care needs better?  The Democrats or the Republicans?  Whomever is elected, drastic changes will need to be made to government spending and taxation to pay for these increases.

For more information on the CMS Study, Click here.