Government Poised to Pay Bulk of US Health Care Tab

March 26, 2010

By 2012, federal and state programs will pay slightly more than half of the nation’s health care costs whether or not any health care reform measures are passed, according to a recent report by the Office of the Actuary of the Centers for Medicare & Medicaid Services.1 As expected, the shift to a government-dominated health care sector is approaching faster than expected because of an economy in recession and because of the aging of the baby boomers, millions of whom will soon start signing up for Medicare.

By 2012, federal and state programs will pay slightly more than half of the nation’s health care costs whether or not any health care reform measures are passed, according to a recent report by the Office of the Actuary of the Centers for Medicare & Medicaid Services.1 As expected, the shift to a government-dominated health care sector is approaching faster than expected because of an economy in recession and because of the aging of the baby boomers, millions of whom will soon start signing up for Medicare.

According to the report, the United States spent an estimated $2.5 trillion for health care in 2009, with government programs (mostly Medicare and Medicaid) paying $1.2 trillion. The other $1.3 trillion was covered by employer health insurance plans and various other private sources. Despite a shrinking US economy, health care spending increased by 5.7% from 2008. The rate of government spending on health care grew almost 3 times faster than that for private spending. Much of this rate increase was from a surge in Medicaid payouts; the program grew almost 10% because many now-jobless persons lost employer-based coverage and the program was expanded to include children of the working poor.

References:

Reference
1. Pallarito K. Government to pay for more than half of US health care costs. Office of Minority Health. http://minorityhealth.hhs.gov/templates/news.aspx?ID=635696. Published February 4, 2010. Accessed February 16, 2010.