Sneak peak: CMS projects expenditures for 2009-2010

Thursday, February 4, 2010

WASHINGTON - CMS projects that national health expenditures grew 5.7% to $2.5 trillion in 2009, up from 4.4% in 2008, according to a report prepared by the agency's Office of the Actuary and published online by the journal Health Affairs. In comparison, the gross domestic product (GDP) is projected to have decreased 1.1% in 2009.

As a result, the health share of GDP is projected to have increased 17.3% in 2009 compared to 16.2% in 2008.

The growth in health expenditures was due, in part, to faster spending for the Medicaid program--a projected 9.9% in 2009, up from 4.7% in 2008--a reflection of growing enrollment due to the recession. Also contributing: an increase in the use of a variety of healthcare services, as many sought treatment for the H1N1 virus.

CMS projects that the growth in health expenditures will decrease to 3.9% in 2010, largely due to a 21.3% reduction in Medicare physician payment rates. Health expenditures are expected to grow 4.7% if that reduction doesn't go into effect.

CMS's projections can be found at: