U.S. health care spending surged in 2009, driven in part by asharp increase in Medicaid spending, the H1N1 virus and thegovernment's subsidization of COBRA premiums.

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Health care expenditures outpaced GDP growth in 2009, accordingto new projections from the Centers for Medicare & MedicaidServices (CMS). Health care spending consumed a record 17.3percent of the U.S. economy. National health care expendituresreached $2.5 trillion, and grew 5.7 percent, up from 4.4 percent in2008.

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CMS expects the health share of U.S. spending increased from16.2 percent of GDP in 2008 to 17.3 percent in 2009, which wouldrepresent the largest one-year increase in history.

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By 2019, national health spending is expected to reach $4.5trillion and comprise 19.3 percent of GDP.

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As a growing number of jobless workers lose their private healthinsurance, private spending is projected to grow at only 2.8percent for this year.

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Over the next 10 years, it's expected public spending willoutpace private spending (7 percent versus 5.2 percent,respectively). By 2012, it is estimated the government (i.e.taxpayers) will be responsible for more than half of the nation'stotal health care expenditures.

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Where the money went:

  • Spending growth for Medicaid was at 9.9 percent, more thandouble 2008's rate at 4.7 percent. CMS says it's also countinggrowth in a variety of health care services as many people soughttreatment for the H1N1 virus.
  • President Obama's federal subsidy program - and its recentextension - also contributed to an increase in the take-up rate for COBRA coverage.
  • Americans were also spending more for private health insurancepremiums. At more than $808.7 billion, this represents a 3.3percent increase. While only slightly above a 3.1 percent increasein 2008, CMS says the steady rate of growth is a result ofjoblessness offset by an increase in COBRA enrollment.
  • Growth in out-of-pocket spending is expected to have slowedfrom 2.8 percent in 2008 to 2.1 percent in 2009 and have reached$283.5 billion. Americans, feeling the pinch of recession, slowedtheir spending on services with significant out-of-pocket costs.Between 2009 and 2019, out-of-pocket spending growth is projectedto average 4.8 percent.
  • Hospital spending growth is expected to have increased 5.9percent in 2009, up from 4.5 percent in 2008, and reached $760.6billion.
  • Physician and clinical services spending growth is expected tohave increased 6.3 percent in 2009, up from 5.0 percent in 2008,and reached $527.6 billion.
  • Prescription drug spending growth is expected to have increased5.2 percent in 2009, up from 3.2 percent in 2008, and reached$246.3 billion. This increase is due in part to higher use ofantiviral drugs, as well as faster price growth for brand-nameprescription drugs.

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