Health care spending devoured 54% of federal revenue in 2009, up from 38% in 2008 and up from 28% in 2007.
Health insurance customers, brokers, insurers and policymakers have been wondering for decades when customers would run out of the ability to absorb further health care and health insurance cost increases.
Insurers may have neared or reached that limit in 2009.
In 2009, the Great Recession led to a big drop in employment. "Job losses caused many people to lose employer-sponsored health insurance and, in some cases, to forgo health care services they could not afford," according to a team of researchers led by Anne Martin, an economist in the Office of the Actuary at the Centers for Medicare and Medicaid Services.
Private employers increased spending on all types of health-related insurance, including products such as workers' compensation insurance and temporary disability insurance, just 0.4%, to $398 billion.
Despite loss of access to employer-sponsored coverage and availability of a temporary federal benefits continuation subsidy program, individuals increased spending on private individual health insurance premiums and contributions for employer-sponsored coverage just 0.2% in 2009, to $248 billion.
"Total private health insurance premium growth decelerated from 3.5% in 2008 to 1.3% in 2009– the slowest rate in the history of the national health accounts," the CMS researchers report.
Growth in premiums per enrollee increased to 4.7% in 2009, from 4.5% in 2008, showing that the driving factor in the slowdown was loss of enrollment, the researchers say. But, because insurers' spending on medical care increased 6.3% in 2009, the net cost of health coverage – the gap between premium revenue and the cost of the benefits provided – fell 1.2%, to $133 billion.
Consumers' out-of-pocket spending on everything other than insurance rose just 0.4%, to $299 billion.
Home health care spending increased 10%, but spending on most categories of health care products and services rose from 3.5% to 5.5%.
In one category – dental — spending fell 0.1%, to about $102 billion.
Total national health expenditures rose 4% in 2009, to $2.5 trillion, mainly because of an 18% increase in federal government health care spending. Federal spending on Medicare, a program that serves elderly people and people with disabilities, increased about 21%, and federal spending on Medicaid, a program for poor people, increased about 22%.
The ratio of federal health care spending to federal revenue skyrocketed to 54% partly because federal health care spending rose so rapidly and partly because federal revenue fell 18%, the researchers say.
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