The New Health Dialogue

We might not be sending anyone to the moon this year, but if you want to watch something rocketing up into space, check out the latest health care spending numbers. Government programs are on the brink of  paying for more than half the total U.S. health care bill -- which itself is growing faster than the overall economy.

"What's driving the growing public role is no mystery," writes blogger Merrill Goozner. "With unemployment at 10 percent and underemployment widespread, millions of Americans have lost employer-based coverage and now must rely on public sector programs. Even where people remain employed, their firms can no longer afford skyrocketing premiums and thus are abandoning or cutting back on coverage."

The Centers for Medicare and Medicaid Services (CMS)  released its annual report tracking U.S. health care spending and here are some sobering highlights:

• Health care spending in the U.S. hit $2.5 trillion in 2009, up 5.7 percent since 2008.

• The recession shrank GDP this year, but health care spending continued to grow. That means that health care spending now takes up an even greater share of our GDP, increasing by 1.1 percent to 17.3 percent. This represents the biggest one year jump in health care spending since the government started keeping track in 1960.

• Public health spending is growing faster than private. Public spending went up by 8.7 percent to $1.2 trillion, while private grew by only 3 percent, to $1.3 trillion. CMS analysts project that enrollment in public programs grew in 2009 (6.5 percent increase in Medicaid enrollment), while private coverage will continue to shrink (declining by 1.2 percent in 2009).

• CMS analysts project an average annual growth rate of 6.1 percent in total health care spending over the next decade, 1.7 percent faster than the GDP. By 2019, health care spending is expected to double, hitting $4.5 trillion, and consume 19.3 percent of the GDP.

You’ve heard what we have to say about the cost of doing nothing on health care reform. The comprehensive health reform legislation passed in both the House and the Senate would help slow rising health care costs and decrease the federal deficit. The problem is only going to get worse without action. As Richard Foster, chief actuary at CMS said in the The Los Angeles Times,

Foster said that the report by his office indicated that two of the main trends driving calls for a health overhaul -- rising costs and shrinking numbers of people with health coverage -- are essentially the same as they were when the healthcare debate began last year.

“With higher unemployment, people lose their jobs [and] many of them lose their healthcare coverage in the process. And under current law, they don't have much to fall back on…Nothing much has changed in that regard."

We just posted too on what the Wall Street Journal's David Wessel sees in the future -- if we don't act.