Nation's Health Spending Climbs To Record High

Health care overhaul may be dead, but the growth in the nation's spending on health keeps on rolling.

Estimates just out from the government show that health spending climbed 1.1 percentage points to account for 17.3 percent of GDP in 2009. That's the biggest annual jump in 40 years.

How much money is that? A lot. A real lot. Try $2.47 trillion, up 5.7 percent from the $2.34 trillion spent on health in 2008. The estimates, prepared by actuaries at the Centers for Medicare and Medicaid Services, appear in the March issue of the journal Health Affairs.

 

Take a look ahead and you'll find that government spending on health care—mostly through Medicare and Medicaid—is growing faster than outlays by the private sector. By 2012, government spending on health is expected to surpass private expenditures for the first time.

So whether you support or oppose greater government involvement in health care under overhaul legislation, there's no escaping the fact that Uncle Sam will be footing most of the nation's health bills very soon.

One factor in the big jump in the share of GDP going to health spending—and the bigger role for the government—is the overall slowdown in the economy. Medicaid enrollment is galloping along as unemployment rises. The flip side: private insurance rolls are shrinking.

Still, the weak economy is expected to slow the overall growth in spending a bit. For this year, the federal actuaries figure health spending with increase 3.9 percent.

But even slow growth adds up. If the government estimates are right, the nation be spending $4.48 trillion or on health care in 2019—19.3 percent of the economy.