Public spending on health care to accelerate

The Office of the Actuary in the Centers for Medicare & Medicaid Services annually produces projections of health care spending. The latest projections begin after 2007 and go through 2018.

From 2008 through 2018, health spending growth is expected to outpace growth in the overall economy by 2.1 percentage points per year.

By 2018, national health spending is expected to reach $4.4 trillion and account for just over one fifth of the gross domestic product.

Because of the recession, private health spending growth, including insurance and out-of-pocket payments, is projected to decelerate from 5.8 percent of GDP in 2007 to a 15-year low of 3.9 percent in 2009, driven by slower income growth and declining private health insurance coverage rates.

Public spending on health care, on the other hand, is projected to accelerate from 6.4 percent of GDP in 2007 to 7.4 percent by 2009.

This is attributed to faster growth in both Medicaid enrollment and expenditures. Medicare spending growth is also projected to be robust in 2008 and 2009, about 8 percent per year.

Source: Centers for Medicare & Medicaid Services

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