Guide Details Rise in Health Care Costs

Spending on health care has risen dramatically in the last decade and out-of-pocket health care expenses have increased for younger Americans, according to the overview document “Health Care Costs: A Primer” released this month by the Henry J. Kaiser Family Foundation.

The primer, which can found at http://www.kff.org/insurance/7670.cfm, doesn’t address health care and consumer debt but offers a broad overview of health care costs, providing a reference guide for those working in the sector.

The U.S. spent $2 trillion on health care in 2005, nearly $6,700 per person and 16 percent of its Gross Domestic Product, according to the primer. In 1995, health care spending was $3,783 per person, accounting for 13.7 percent of the GDP. The Centers for Medicare and Medicaid Services (CMS) has estimated that health care spending will account for 19.6 percent of the GDP by 2016.

Private health insurance covered about 36 percent of health spending, public programs like Medicare, Medicaid and state programs covered about 45 percent of spending, and out of pocket payments accounted for much of the rest.

When broken down by type of health care service provided, hospital care in 2005 accounted for nearly 31 percent of national health spending followed by physician/clinical services with 21.2 percent. Other health spending and other personal health care combined accounted for 29.4 percent of spending. The report did not specify what “Other” referred to. Prescription drugs were 10.1 percent of spending followed by nursing home care with 6.1 percent and home health care with 2.4 percent.

Out of pocket expenses for health care increases have been rising for non-elderly individuals. The percentage of younger patients that saw out-of-pocket medical expenses exceed 10 percent of income rose from 16 percent in 1996 to 19 percent in 2003, according to the Kaiser report.

Those out-of-pocket expenses have become even more burdensome for those who earn less than the federal poverty level, with medical costs exceeding 10 percent of income for 33 percent of the non-elderly poor in 2003, up from 26 percent in 1996.

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