Navigation Links
Recession Scrambling Health Spending in U.S.
Date:2/24/2009

As more people lose their jobs and health insurance, they're turning to federal programs such as Medicaid, report says

TUESDAY, Feb. 24 (HealthDay News) -- Although millions of Americans have lost their jobs -- and their health insurance -- during the current recession, health care spending in the United States is expected to have its largest single-year increase in 2009.

That's the surprising conclusion of a report released Tuesday by the Centers for Medicare and Medicaid Services (CMS).

"Private spending [spending by private health insurance] is expected to slow in 2008-2009 to a 15-year low due to the impact of the recession" as more people lose their jobs and with them, their employer-based health insurance, CMS economist Andrea Sisko, one of the authors of the government report, said during a Monday teleconference. "Conversely, public spending growth is expected to accelerate through 2009, in part, due to increased Medicaid enrollment and expenditures, something that is typically seen in a recession."

Sisko noted the projections did not take into account the recently enacted $787 billion stimulus package or the 2010 federal budget proposal, to be unveiled Thursday by President Barack Obama, or any health care reforms that might be proposed by the new administration.

The report by economists from CMS, titled Health Spending Projections Through 2018: Recession Effects Add Uncertainty To The Outlook, was published in the Feb. 24 online edition of Health Affairs.

The release of the CMS report comes on the same day as a new report from the U.S. Institute of Medicine that calls for President Barack Obama and Congress to come up with solutions for the 45.7 million Americans not covered by health insurance and to find ways to stem the tide of growing health care costs.

And in a televised address Tuesday night, Obama plans to outline his goals for his first year in office, including his pledge to reform health care. The White House says the President believes that out-of-control costs are the main obstacle to providing insurance coverage for all.

The new CMS report seeks to project health care spending for the next 10 years.

For instance, by 2018 health care spending is projected to reach $4.4 trillion -- accounting for 20.3 percent of the U.S. gross domestic product (GDP). In 2008, health care spending reached 16.6 percent of GDP. In 2009, health care's share of GDP is expected to reach 17.6 percent of GDP, the largest one-year increase ever seen, the report said.

As spending by private health care insurance reaches a 15-year low as more people lose their jobs, spending by the federal and state governments is expected to grow from $1 trillion in 2008 to $1.2 trillion in 2009, an increase of 7.4 percent. This growth is being fueled by more people losing their jobs and then electing to sign up for Medicaid, the report authors said.

Once the recession starts to ease next year, there should be an upturn in both private and public health care spending, according to the report. Starting in 2010, private health care spending is expected to rise by 4.2 percent and increase to 6.1 percent in 2018, Sisko said.

Among the report's highlights:

  • Medicare spending grew 8.1 percent from 2007 to 2008, driven largely by growth in prescription drug spending as well as hospital, doctor and administrative costs.
  • In the near term, spending on prescription drugs is expected to slow, but then double between 2014 and 2018.
  • The recession is expected to slow the growth of out-of-pocket spending by consumers, a trend typically seen during an economic downturn. Also, growing Medicaid rolls will reduce out-of-pocket spending since these out-of-pocket costs are typically lower for Medicaid recipients.
  • Public spending is expected to rise as more baby boomers enroll in Medicare. That growth in public health care spending is projected to reach 7.2 percent a year by 2018 and account for more than half of all health care spending.
  • Nursing home spending is expected to increase to a 6.6 percent annual rate by 2018 as more people enroll in Medicare and Medicaid.

One expert thinks the CMS report reflects the true impact of the recession on health care.

"This just shows you that hard times affect people's ability to obtain health care," said Paul Precht, director for policy and communications at the Medicare Rights Center. "If it weren't for Medicaid, it would be a lot worse."

An estimated 14,000 Americans are losing their health insurance each day during the recession. In response, the Institute of Medicine report, America's Uninsured Crisis: Consequences for Health and Health Care, urges President Obama and Congress to immediately put into place programs to achieve health coverage for all Americans. The report also said costs need to be controlled to ensure that health care is affordable for everyone.

"Policymakers and the public can no longer presume that those without health insurance are getting the care they need through safety-net services such as charity care and emergency departments," Institute of Medicine Committee Chairman Lawrence S. Lewin, an executive consultant in health care policy and management, said in a statement. "The evidence clearly shows that lack of health insurance is hazardous to one's health, and the situation is getting worse because of the erosion of employment-based health coverage due to the current economic crisis. The nation must act now to solve the uninsurance problem."

More information

To read the full CMS report, visit Health Affairs.



SOURCES: Paul Precht, director, policy and communications, Medicare Rights Center, Washington, D.C.; Feb. 23, 2009, teleconference with Andrea Sisko, economist, Centers for Medicare and Medicaid Services, Baltimore; Feb. 24, 2009, Health Affairs; Feb. 24, 2009, Institute of Medicine, America's Uninsured Crisis: Consequences for Health and Health Care


'/>"/>
Copyright©2009 ScoutNews,LLC.
All rights reserved

Related medicine news :

1. Recession Spawns Vital New Industry - Financial Wellness
2. Partnership for Prescription Assistance Prepared to Help Texas Workers Hurt by Recession
3. Bay Area Fertility Clinic to Offer Special Help During Recession
4. Laid Off Public Health Workers Excluded From Senate Stimulus, Governmental Health Laboratories Slammed by Recession
5. Recession-Proof Your Career: High Job Growth Expected for Rehab Therapists
6. Top 10 Ingredients for Recession-Proof, Healthy Cooking
7. CPEhr Releases New White Paper Highlighting Value of Human Resources Outsourcing In A Recession
8. Hospital Expansions in Buffalo, N.Y., and Baton Rouge, La., Contribute to Recession Resilience
9. AHP Recession Survey of Nonprofit Health Care Officials Finds Almost Half Expect Reduced Giving in 2009, Leading to Cuts in Hospital Construction and Equipment Purchases
10. CSC Survey Reveals Hospitals Find Current Recession Far Worse Than Last Downturn; Emergency Visits to Climb
11. BCBSNC Helps Customers Fight Recession With Free Generics
Post Your Comments:
*Name:
*Comment:
*Email:
(Date:6/25/2016)... ... ... closing of Bruton Memorial Library on June 21 due to a possible lice infestation, as ... of head lice: the parasite’s ability to live away from a human host, and to ... one in the event that lice have simply gotten out of control. , As lice ...
(Date:6/25/2016)... ... ... As a lifelong Southern Californian, Dr. Omkar Marathe earned his Bachelors in ... School of Medicine at UCLA. He trained in Internal Medicine at Scripps Green Hospital ... at the UCLA-Olive View-Cedars Sinai program where he had the opportunity to train in ...
(Date:6/25/2016)... ... June 25, 2016 , ... Conventional wisdom preaches the ... In terms of the latter, setting the bar too high can result in disappointment, ... just slow progress toward their goal. , Research from PsychTests.com reveals ...
(Date:6/24/2016)... (PRWEB) , ... June 24, 2016 , ... June 19, ... the dangers associated with chronic pain and the benefits of holistic treatments, Serenity ... who are suffering with Sickle Cell Disease. , Sickle Cell Disease (SCD) is a ...
(Date:6/24/2016)... Fla. (PRWEB) , ... June 24, 2016 , ... Global ... Trend magazine’s 2016 Legal Elite. The attorneys chosen by their peers for this recognition ... Florida. , Seven Greenberg Traurig Shareholders received special honors as members of this year’s ...
Breaking Medicine News(10 mins):
(Date:6/26/2016)... 2016 One of Australia,s successful ... of a new biotechnology company, Noxopharm Limited [ABN 50 608 966 ... and to list on the ASX. Noxopharm is a ... enter a Phase 1 clinical study later this year. ... of the biggest problems facing cancer patients - the ability of ...
(Date:6/26/2016)... 2016 Jazz Pharmaceuticals plc (Nasdaq: ... Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended ("HSR"), ... Inc. ("Celator"; Nasdaq: CPXX ) expired effective ... As previously announced on May 31, 2016, ... agreement under which Jazz Pharmaceuticals has commenced a tender ...
(Date:6/26/2016)... -- VMS Rehab Systems, Inc. ( www.vmsrehabsystemsinc.com ) reported today ... to build a strong and stable market for trading ... the OTC Markets-pink current trading platform. Explains ... seeing an anomaly in market trading activities that may ... Company, but shareholders and market players as well. I ...
Breaking Medicine Technology: