The Office of the Actuary, an independent arm at the Centers for Medicare and Medicaid Services (CMS), released a new report showing that "National health spending accounts for the largest share of the U.S. economy since federal auditors began tracking the data in 1960." And, minus some sort of reform effort, it's only going up.
In 2009, national health spending made up a record 17.3 percent of the gross domestic product, a 1.1 percentage point increase from 2008, the largest-ever one-year increase reported, the CMS actuaries report based on preliminary estimates.
Total health spending grew 5.7 percent to $2.5 trillion last year. That rate of growth is faster than the 4.4 percent in 2008 but still less than the 6 percent reported in 2007. The 2008 figure was the lowest growth rate since the CMS actuaries began issuing these reports 50 years ago.
Igor Volsky at the Wonk Room has more:
The new analysis flips the conservative narrative. It’s not that health care reform will result in a government take over of the health care system. The truth is, reform that slows the rate of growth in health care spending would reduce the government’s investment in the system.... Increased enrollment in Medicare and Medicaid as well as a decrease in the number of people with private insurance accounted for much of the growth in health care spending:
- U.S. health spending hit $2.5 trillion in 2009, up 5.7% from the previous year. That represents 17.3% of GDP, up from 16.2% in 2008.
- Public spending on health care will rise to 50.4% by 2011. Last year, the federal actuaries had predicted the 50% mark wouldn’t be reached until around 2016.
- Total health spending is expected to grow increasingly faster each year after bottoming out in 2010, reaching 7.0 percent by 2016
- For 2009–2019, health spending is expected to grow at an average annual rate of 6.1 percent (1.7 percentage points faster than GDP) and to climb to $4.5 trillion by 2019
All the Blue Dogs and deficit peacocks worried about taking the extraordinary step of passing some kind of reform through reconciliation need to get over it. We can't afford to put it off.