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Health care costs account for more than half of federal revenue in 2009 Posted: January 7th, 2011

By Maryalene LaPonsie

Despite a historically low percentage of growth, health care spending accounted for more than 54 percent of federal revenues in 2009. That's a 16 percent increase from 2008. The increase is attributed to rising federal health care costs combined with declining federal revenues resulting from the economic recession.

$8,086 Average

The numbers are part of an analysis completed by the federal Centers for Medicare & Medicaid Services (CMS). At 4 percent, overall health care spending in the United States experienced the slowest level of growth recorded since the government began its tracking 50 years ago. Spending totaled $2.5 trillion and averaged $8,086 per person.

Federal health care spending increased by 18 percent overall. Medicare costs rose 21 percent while the Medicaid program saw a 22 percent jump in its health care spending.

Meanwhile, private health insurance companies experienced a 3.2 percent decline in enrollment which helped limit spending growth to 1.3 percent in 2009.

Home health care rises

Health care categories seeing the largest increases in spending growth include:

  • Home health care: 10 percent
  • Retail prescription drugs: 5.3 percent
  • Hospitals: 5.1 percent
  • Physicians and clinical care: 4 percent