Skip to main content

CMS: Growth in national health expenditures expected to slow by 2009

By Chelsey Ledue

Growth in national health expenditures is expected to significantly outpace economic growth in 2009 due to the recession, according to a report issued by the Centers for Medicare & Medicaid Services.

When the fugures for 2008 are tabulated, growth in national health expenditures is expected to have been 6.1 percent, as health spending increased from $2.2 trillion in 2007 to $2.4 trillion in 2008, while growth in the economy, as measured by the gross domestic product (GDP) is anticipated to have been 3.5 percent.

For 2009, health spending is projected to increase 5.5 percent, while the GDP is expected to decrease 0.2 percent.  The health share of the GDP is expected to increase from 16.2 percent in 2007 to 16.6 percent in 2008 and 17.6 percent in 2009. This represents about one-third of the total increase in the health share of the GDP for 2008 through 2018.

Over the period from 2008-2018, average annual health spending growth (6.2 percent) is anticipated to outpace average annual growth in the overall economy (4.1 percent). By 2018, national health spending is expected to reach $4.4 trillion and comprise more than one-fifth (20.3 percent) of the GDP.

During the projection period, average annual spending growth by public payers (7.2 percent) is expected to outpace that of private payers (5.3 percent). As a result, the public share of total healthcare spending is expected to rise from 46.2 percent in 2007 to omore than 50 percent by 2016, and then reach 51.3 percent by 2018.

Private health spending growth, which includes growth in private health insurance spending and out of pocket payments, is projected to decelerate from 5.8 percent in 2007 to 5.3 percent in 2008. It is then projected to reach a 15-year low of 3.9 percent by 2009, driven by expected slower income growth and a decline in the number of people covered by private health insurance.