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Health Care Costs In US Will Double Over Next 10 Years
Several News agencies have reported that The Centers for Medicare & Medicaid Services' (CMS) Office of the Actuary has released a report detailing "National Health Expenditure Projections 2006-2016. The study published in the February 2007 journal Health Affairs was conducted by economists at the National Health Statistics Group of the U.S. Centers for Medicare and Medicaid.
The study states that spending on health care in 2006 was at $2.1 trillion and is expected to rise to $4.1 trillion by the year 2016. John Poisal, deputy director of the National Health Statistics Group, and lead author of the study told reporters a major factor was an aging population as the "leading edge of the baby boom generation becomes eligible for Medicare." He continued and explained, "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." Medicare Part D is the Medicare prescription drug program.
Currently, health care costs Americans 16 cents on every dollar spent in the US. That figure will rise to 20 cents within a decade. One of the concerns raised in all the articles was how this increase is to be paid for. According to the study, taxpayers will bear the greatest burden as there is a shift from private insurance to Medicare as the population grows older, and Medicare Part D pays for more medications. Prescription drug spending will account for the largest portion of the increases as it goes from 7.4% in 2007 to nearly 10% expected by 2016.
Additionally the study noted that out-of-pocket expenses will soar as well. Presently the study estimates that Americans paid $250 billion of health care costs in 2006. That figure will rise to $440 billion by 2016. To put this more into perspective, as of 2006 the average American paid $846.50 out of pocket. That is expected to rise to $1,405.73 by 2016. This does not include the portion of taxes and salary that go to health care costs.