Medicaid spending will grow annually at a rate of 7.9 percent over the next 10 years, reaching $674 billion by 2017.

That compares with a projected rate of growth of 4.8 percent in the general economy - and a 6.7 percent rate of growth in overall health expenditures, according to the report released Friday by the Centers for Medicare and Medicaid Services (CMS).

The program's share of the gross domestic product (GDP) is projected to reach about 3 percent in 2017. The combined share of GDP spending for Medicare and Medicaid is projected to be 6.9 percent by 2017.

"This report should serve as an urgent reminder that the current path of Medicaid spending is unsustainable for both federal and state governments. We must act quickly to keep state Medicaid programs fiscally sound," said U.S. Health and Human Services Secretary Mike Leavitt. "If nothing is done to rein in these costs, access to health care for the nation's most vulnerable citizens could be threatened."

Medicaid is a federal-state partnership program that provides health care to certain low-income people and is one of the largest payers for health care in the United States.

For both federal and state governments, the program is the largest source of general revenue spending on health services.

In Utah, Medicaid makes up nearly 90 percent of the Utah Department of Health's $384 million budget. More than 300,000 people are enrolled in the program.

The National Association of State Budget Officers is projecting that state spending on Medicaid will increase by 4.4 percent from 2008 to 2009, an increase that would be more than four times the rate of growth in the average state general fund.

"High and increasing Medicaid spending clearly leaves states less able to fund other state priorities," said acting CMS Administrator Kerry Weems. "This new financial report confirms that America's health care system faces significant fiscal challenges."

Other findings from the report include:

* Average Medicaid enrollment is projected to increase 1.8 percent to 50 million people in 2008.

* During the next 10 years, average enrollment is projected to increase at an average annual rate of 1.2 percent and to reach 55.1 million by 2017.

* The estimated average cost of a person covered by Medicaid in 2007 is $6,120; however, per-enrollee spending for non-disabled children ($2,435) and adults ($3,586) was much lower than that for aged ($14,058) and disabled beneficiaries ($14,858), reflecting the differing health status of these groups.

* Medicaid represented 14.8 percent of all health care spending in the United States in 2006.

See the report at www.cms.hhs.gov/ActuarialStudies/03MedicaidReport.asp

lrosetta@sltrib.com