Medicare Drug Plan Fuels Health-Care...( But Medicaid spending slowed for firs...),Health

But Medicaid spending slowed for first time since its inception in 1965,,

TUESDAY, Jan. 8 (HealthDay News) -- The new Medicare prescription drug plan was largely responsible for an 18.7 percent increase in Medicare spending in 2006, which was double the increase in spending from the year before, U.S. health officials report.

In 2006, Medicare spending reached $401.3 billion, an increase from $338 billion in 2005, officials from the National Health Statistics Group at the U.S. Centers for Medicare and Medicaid Services, Office of the Actuary, said.

"National growth of health-care spending in 2006 was slightly faster than in 2005, increasing 6.7 percent following growth of 6.5 percent," Cathy Cowan, an economist in the National Health Statistics Group at the U.S. Centers for Medicare and Medicaid Services, Office of the Actuary, said during a news conference Monday afternoon.

"Expenditures reached $2.1 trillion or $7,000 a person," Cowan added. That rate was up from the 6.5 percent rate in 2005. The 2005 rate was the slowest growth since 1999.

The report appears in the January/February issue of Health Affairs.

At the same time that the Medicare drug plan increased spending, spending by Medicaid dropped for the first time since 1965, to $310.6 billion in 2006 from $313.5 billion in 2005. This drop was mostly due to drug coverage for people who were eligible both for Medicare and Medicaid being transferred to Medicare, Cowen said.

Richard Foster, chief actuary at the National Health Statistics Group at the U.S. Centers for Medicare and Medicaid Services, said the cost of the Medicare drug program, which took effect in 2006, was less than originally projected.

"The actual cost of Part D in 2006 was significantly below the cost we estimated before the program was implemented, and it continues to be lower than later estimates based on the actual bids from the plans," Foster s
'/>"/>