Health Care Costs Approach $2 Trillion

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Health Care Costs Approach $2 Trillion

Rise in Costs Slows, but Families Paying More, Gov't Says

By Todd Zwillich

WebMD Medical News Reviewed By Louise Chang, MD

on Tuesday, January 09, 2007

Jan, 8, 2007-- In 2005, the nation's health care spending grew at its slowest

rate since 1999, but there are clear signs American consumers are being forced

to shoulder a greater share of their own costs, the government reported Tuesday.

Spending on medical care set a new record of $1.99 trillion in 2005. That figure

makes up a full 16% of the nation's economic output, reported the Centers for

Medicare and Medicaid Services, which tracks health spending each year.

Overall spending was up 6.9% from the year before. Despite the staggering dollar

figure, that is a far slower rate than the double-digit increases seen in the

late 1980s and early 1990s.

Last year marked the first time since the 1990s that the nation's economy

roughly kept pace with its health care bills.

Officials said a slowdown in the rise of insurance premiums and prescription

drug costs were responsible for the overall deceleration in medical spending.

Prescription costs grew at the slowest rate since 1993, the report showed.

" At least for now, health spending and economic growth are comparable, "

Catlin, an economist at the National Health Statistics group, told reporters.

Federal and state governments now pay about 40% of all health bills. American

households pay 31% through private insurance premiums, deductibles, taxes, and

other " out-of-pocket " costs.

Higher Costs to Come

Businesses, consumers, and the government all see their costs go up as the total

cost of medical care and insurance coverage rises.

But there are signs consumers are being forced to spend a bigger chunk of their

budget on their health care, the report showed.

Spending on insurance premiums and deductibles went up to 5.8% in the average

U.S. household, after holding steady at roughly 5% for several years.

, Medicare's chief actuary, said that overall, health costs,

wages, and the economy appear to be in a " dead heat. " But he warned that the

condition is almost certainly temporary.

New medical tests, drugs, and other technologies tend to drive up prices because

they are more expensive.

Also, economists expect the growing ranks of senior citizens to continue to push

spending upward.

" We don't really see much that's going to change that for a long time to come, "

says.

In an interview, Sen. Max Baucus (D-Mont.), chairman of the Finance Committee,

praised the slowdown in health spending but warned that a spending crisis is not

over.

" For families, health care costs are way too high, " he said.

SOURCES: Catlin, . Health Affairs, " National Health Spending in 2005: The

Slowdown Continues, " January/February, 2007. Catlin, economist, National

Health Statistics Group, Centers for Medicare and Medicaid Services.

, chief actuary, Centers for Medicare and Medicaid Services. Sen. Max

Baucus (D-Mont.).

http://www.webmd.com/content/article/131/117998.htm?printing=true