Health Care: 20% U.S. Spending in 2016

Feb. 21, 2007 — Health care will account for nearly 20 cents of every
dollar spent in the U.S. in 2016, government experts predict.
If so, America’s health care tab will be nearly twice as large as in
2006.
U.S. health care spending weighed in at $2.1 trillion last year. By 2016,
the figure is projected to jump to $4.1 trillion, according to a government
report published in Health Affairs.
Researchers included John Poisal, deputy director of the National Health
Statistics Group, which is part of the Office of the Actuary in the Centers for
Medicare and Medicaid Services.
The report predicts the annual growth rate for prescription drug spending
will soar from 7.4% in 2007 to nearly 10% in 2016.
The growth in health care spending on hospitals, expected to be about 7%
starting this year, is predicted to keep that pace through 2016, according to
the report.
Big Tab, Tough Choices
Poisal’s team predicts rising out-of-pocket costs for consumers and shifts
in health insurance away from employer-based coverage to federal and state
government plans.
“Although recent changes in health care spending growth have been
modest, some of the most dramatic changes taking place are the shifts in
payment distribution in Medicare, Medicaid, and the private insurance industry
as Medicare Part D is fully implemented,” Poisal says in a Health
Affairs news release.
Medicare Part D is the Medicare prescription drug program.
“As the nation moves from more traditional sources of insurance, such as
employer-based coverage, to more federal- and state-provided health care, we
will continue to face tough questions about how we finance our health care
bill,” Poisal says.
The U.S. will continue to face “key issues” about health care,
including “the possibility that we will have to make important sacrifices
to pay for health care,” write the researchers.
They caution that their predictions are based on current trends in health
care spending. If those trends change, the predictions may not hold.