Health News

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.