APRIL 01, 2007

A new report has predicted that by 2016 US health care spending will almost double to $4.1 trillion and will account for 20% of every dollar spent. The researchers calculated that public and private health care spending will increase to ~$12,782 per capita by 2016 from ~$7498 per capita in 2006.

The document, released by the National Health Statistics Group at the Centers for Medicare & Medicaid Services, disclosed that Medicare, Medicaid, and other public programs currently account for 40% of Rx drug spending, compared with 28% in 2005. The report also indicated that the increase in public prescription spending could result in future problems because the Medicare prescription drug benefit lacks long-term financial stability.

In terms of Medicare and Medicaid spending, the researchers estimated that total Medicare spending rose by 22% to $418 billion in 2006 from $342 billion in 2005. They said, however, that spending would increase by only 6.5% in 2007 because of reductions in reimbursements to physicians and smaller increases in payments to Medicare Advantage plans. The investigators also found that, by 2016, 32% of eligible beneficiaries will enroll in Medicare Advantage plans, compared with 13.5% in 2005.