Recession Accelerates Shift Towards Greater Control of Washington in Health Care

Nina Owcharenko Schaefer / January 06, 2011

While overall health care spending slowed in 2009, it is the underlying trend that is more troubling: the continuing decline in private coverage and the steady increase in government health care. These trends will only accelerate under Obamacare.

According to the Centers for Medicare and Medicaid Services (CMS), total health care spending grew by 4 percent in 2009 to reach $2.5 trillion. This represents a slower rate of growth from 2008, but the slower increase still outpaced spending as an overall percentage of GDP.

The 3.2 percent decline in private coverage and the slowing of out-of-pocket spending by consumers are attributed to the recession. Fewer people with jobs mean fewer people with traditional employer-based health care coverage and less income to pay for health care.

The decline in private coverage is reportedly offset by a massive increase in Medicaid as more individuals enroll in the government health care program for the poor. According to CMS, Medicaid spending grew at a rate of 9 percent, nearly doubling from 4.9 percent in 2008. Moreover, the federal share of this spending increased 22 percent as the federal government picked up a greater share of the cost as directed under the stimulus bill. (more…)