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U.S. health-care expenditures up only 4 percent in 2009, suggesting effects of recession

January 5, 2011
In The News

By: Amy Goldstein, Washington Post
Published: January 5, 2011

The nation's expenditures on health care in 2009 grew by 4 percent, the smallest increase in at least a half-century, according to new federal figures that suggest Americans stinted on medical services as they lost jobs and insurance in the recent recession.

Although health insurance premiums rose slightly faster than they did a year earlier, overall spending on private health insurance decelerated as the number of people with such coverage fell by 6.3 million. And the out-of-pocket amount Americans spent on health care barely increased, the figures show.

On the other hand, spending on Medicaid soared - by 9 percent, compared with less than 5 percent in 2008 - as more people qualified for the public insurance program for the poor.

Taken together, the figures, contained in a report released Wednesday by the Department of Health and Human Services, indicate that the severe recession that ended in mid-2009 left a quicker and deeper imprint on the health-care landscape than did other recent economic downturns.

"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 the report prepared by economists and statisticians at HHS's Centers for Medicare and Medicaid Services. Compiled by the government annually since 1960, it is the most recent version of a snapshot of spending across the health-care system.

Overall, U.S. health-care spending reached $2.5 trillion, or an average of $8,086 per person. The 4 percent increase in spending in 2009 compares with more than 6 percent two years earlier, 8 percent in 2005 and double-digit jumps in 1990 and 1980.

Despite the deceleration, health expenditures continued a long-term trend of gobbling up an ever-larger share of the economy. As the gross domestic product contracted, in 2009, health-care costs accounted for 17.6 percent of the GDP - the largest one-year increase since the government has been keeping track.

The period covered in the report ended months before Congress last year passed a broad law intended to change the health-care system, so the figures do not reflect any effects of the measure.


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