Recession Scrambling Health Spending in U.S.

Feb. 25 -- TUESDAY, Feb. 24 (HealthDay News) -- Although millions of Americans have lost their jobs -- and their health insurance -- during the current recession, health care spending in the United States is expected to have its largest single-year increase in 2009.

That's the surprising conclusion of a report released Tuesday by the Centers for Medicare and Medicaid Services (CMS).

"Private spending [spending by private health insurance] is expected to slow in 2008-2009 to a 15-year low due to the impact of the recession" as more people lose their jobs and with them, their employer-based health insurance, CMS economist Andrea Sisko, one of the authors of the government report, said during a Monday teleconference. "Conversely, public spending growth is expected to accelerate through 2009, in part, due to increased Medicaid enrollment and expenditures, something that is typically seen in a recession."

Sisko noted the projections did not take into account the recently enacted $787 billion stimulus package or the 2010 federal budget proposal, to be unveiled Thursday by President Barack Obama, or any health care reforms that might be proposed by the new administration.

The report by economists from CMS, titled Health Spending Projections Through 2018: Recession Effects Add Uncertainty To The Outlook, was published in the Feb. 24 online edition of Health Affairs.

The release of the CMS report comes on the same day as a new report from the U.S. Institute of Medicine that calls for President Barack Obama and Congress to come up with solutions for the 45.7 million Americans not covered by health insurance and to find ways to stem the tide of growing health care costs.

And in a televised address Tuesday night, Obama plans to outline his goals for his first year in office, including his pledge to reform health care. The White House says the President believes that out-of-control costs are the main obstacle to providing insurance coverage for all.

The new CMS report seeks to project health care spending for the next 10 years.