National Health Care Expenditures Projections: 2005-2015

Health care spending in the United States is projected to grow 7.4% and surpass $2 trillion in 2005, down from the 7.9% growth experienced in 2004. This is the third consecutive year of decelerating growth, following six years of acceleration from 1996 through 2002.

As a percentage of Gross Domestic Product (GDP), health care spending is expected to continue to grow, reaching 16.2% in 2005, up from 16.0% in 2004. By 2015, health care spending in the United States is projected to reach $4.0 trillion and 20.0% of GDP.

Out of pocket spending growth is expected to remain essentially flat in 2005, and then decrease substantially due to Medicare Part D coverage in 2006. Out of pocket share of health care spending is expected to decline from 15.1% in 2004 to 12.6% by 2015.

Activity in selected areas: 

• Hospital spending is projected to grow by 7.9%
  
  
• Private payer spending is projected to show average growth of 7.9% through 2015
  
  
• Medicaid public payer spending is projected to slow gradually to an average of 6.8% by 2015 due to decreased Medicaid enrollment and legislative adjustments to managed care payments
  
  
• Medicare public payer spending is projected to average 7.6% growth after implementation of the Medicare Part D benefit
  
  
• Prescription drug spending growth is expected to stabilize between 8.0% and 8.4%
  
  
• Home health spending growth will remain above 10%, but will begin to drop by 2007 toward a longer term average of 6.9% growth 
  
  
• Medicaid home health spending growth is expected to grow to 18.6% for 2005, and then settle to an average growth rate of 10.9%