The Centers for Medicare & Medicaid Services ("CMS") Issue Report on Projected National Health Expenditures

On February 24, 2009, CMS released a report on projected national health expenditures.  In 2008, health care spending is projected to be $2.4 trillion, an increase of 6.1 percent from 2007.  At the same time, growth in the economy, as measured by the gross domestic product (“GDP”) is expected to be 3.5 percent.  For 2009, health care spending is projected to increase 5.5 percent while the GDP is expected to decrease 0.2 percent.  As a percentage of the GDP, CMS expects health care spending will increase to 17.6 percent in 2009, up from 16.6 percent in 2008.  By 2018, CMS predicts health care spending will reach $4.4 trillion and comprise 20.3 percent of the GDP.

Within Medicare, CMS predicts prescription drugs will be the fastest growing component of spending.  The prescription drug share of Medicare spending is expected to increase from 10.9 percent in 2007 to 14.7 percent in 2018.