04
Feb
10

Tipping-point to government as #1 health payer is at hand

Today a burst of news about the cost of health care in the US, now and in the future, has hit the front pages. An AP report in PhysOrg.org says that yesterday Medicare’s Office of the Actuary released estimates indicating that by 2012 half of the health care in the nation will be paid for by federal and state government though Medicare and Medicaid. Earlier projections put the crossover in 2016.

There are two main reasons for this: 1) Baby Boomers will start hitting the Medicare system in 2011, and 2) the recession. The recession has thrown people out of work and out of health care plans onto Medicaid.

The report estimated that in 2009, the United States spent $2.5 trillion for health care, with government programs – mainly Medicare and Medicaid – paying $1.2 trillion. Employer health insurance and various private sources covered the other $1.3 trillion. Even as the economy shrank because of the downturn, health care spending grew by 5.7 percent from 2008. Spending by government grew nearly three times faster than private spending, closing in to overtake it.

In other data reported in Health Affairs looks at a little differently.

In 2009 the health share of gross domestic product (GDP) is expected to have increased 1.1 percentage points to 17.3 percent—the largest single-year increase since 1960. Average public spending growth rates for hospital, physician and clinical services, and prescription drugs are expected to exceed private spending growth in the first four years of the projections. As a result, public spending is projected to account for more than half of all U.S. health care spending by 2012.

So…government in one form or another is set to become the biggest payer of all in health care, ready or not.

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1 Response to “Tipping-point to government as #1 health payer is at hand”


  1. 1 Stellie
    February 5, 2010 at 10:39 am

    Trillion…I can’t even fathom. I just pray that the US. will build an effective evaluation system for medical billing and also come up with accurate billing guidelines. For instance, how can people justify an ambulance ride for over $2000 even for people with minor symptoms? I say people, “Don’t call an ambulance – unless you are bleeding or having a heart attack; call a luxury cab!!”


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