BizJournals Portfolio
Feb 04 2010 9:00am EDT

U.S. Pays Bigger Chunk of Health Care Tab

Americans don't want to pay for more government-subsidized health care and they don't want to see the government's role expanded. Those points are reflected in polls after Congress spent much of last year debating health reform.

Well guess what? Those things are happening without any law being passed. Government programs are poised to pay for more than half of all health care expenses by 2012, new estimates show.

In fact, by 2020, health care will account for one in five dollars spent by the U.S. government. That's far more than any other industrial nation.

The cause: People are losing their private health insurance as they get laid off, more Americans are going on Medicaid and Medicare costs continue to rise. Something is going to have to give. Either taxes are going to be raised or Medicare and Medicaid benefits are going to be cut.

Health spending by the government ($1.2 trillion) is believed to have grown much faster in 2009 (almost 9 percent) than that of private insurers (3 percent to $1.3 trillion), government actuaries say in a paper published in the journal Health Affairs.

As a share of gross domestic product, health care is estimated to have increased 1.1 percentage points to 17.3 percent, which is the largest single-year increase since 1960, the actuaries say.

"It's going to be a desperate issue five to 10 years out," Gail Wilensky, former head of Medicare under President George H.W. Bush, tells the Wall Street Journal.


Brett Chase covers health care for Portfolio.com and writes the blog Heavy Doses.

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