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CMS Actuaries Find Slower Health Spending Growth

By Staff Writer

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Private U.S. health insurers’ spending on health care rose 6.6% in 2005, to $694 billion.

Economists with the Office of the Actuary at the Centers for Medicare and Medicaid Services have included those figures in a health care spending report published in Health Affairs, a health policy journal.

Total U.S. health care spending increased 6.9% in 2005, to about $2 trillion, but the rate of increase slowed from 7.9% from 2004, the researchers write.

The 2005 health care spending total averaged $6,697 per person and amounted to 16% of the U.S. gross domestic product.

Despite reports about employers trying to shift more responsibility for paying for care to employees, consumers’ out-of-pocket health care spending increased just 5.8% in 2005, to $249 billion, according to the CMS researchers.

Medicare spending increased 9.3%, to $342 billion, and Medicaid spending increased 12%, to $179 billion.

Successful efforts to control prescription drug spending by private payers and government plans appear to be responsible for much of the moderation in health care spending, the CMS researchers write.

Drug spending growth slowed to 5.8%, down from 8.2% in 2004. In 2004, drug spending growth was below 10% for the first time in a decade.

Home health care was one possible area of concern: There, total spending increased 11%, to $47 billion.

But spending on nursing home care increased just 6%, to $122 billion.