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Study: Health Care Spending to Pass $4 Trillion by 2016

By CQ Staff

February 21, 2007 -- U.S. health care spending is expected to double from today's level, reaching $4.1 trillion, or 16 percent of the gross domestic product, over the next decade, according to new government data released Wednesday.

By 2016, health care expenditures will consume almost 20 cents of every dollar spent, according to estimates from economists and actuaries at the Centers for Medicare and Medicaid Services Office of the Actuary. The findings were published Wednesday as a Web exclusive by the journal Health Affairs.

Other highlights of the report include:

  • Growth in health spending is expected to drop slightly from 6.9 percent in 2005 to 6.8 percent in 2006, marking the fourth consecutive year of a spending slowdown. The Medicare drug benefit, slower projected growth in Medicaid, and slower growth in private health care spending are contributing to that trend, the report's authors say.
  • Consumers' out-of-pocket spending on health care, expected to reach $250.6 billion in 2006, is projected to climb to more than $440.8 billion in 2016.
  • Total Medicare spending growth is expected to reach $417.6 billion in 2006 with the addition of the Medicare drug program, up from $342.0 billion in 2005.

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