Healthcare expenditures in the U.S. rose 4% in 2009, according to CMS, the slowest rate of increase since the government began tracking spending 50 years ago. CMS attributed the slowdown in large part to the recession. Conclusion: We finally have figured out how to slow healthcare spending growth — tank the economy. Actually, that doesn’t really work either because healthcare expenditures as a percentage of GDP jumped 100 basis points to 17.6% in 2009 — the largest one-year increase in 50 years.
Not surprisingly, during the recession, healthcare spending by Medicaid rose a whopping 9% — with the federal government taking on a larger share of the burden. In fact, federal government spending on Medicaid rose 22% in 2009, compared to a 10% decline in state Medicaid spending. Meanwhile, out-of-pocket spending by consumers rose just 0.4%. Spending by private insurance companies rose just 1.3%, reflecting a decline in enrollment.