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1993.01.29 :  Report -- America's Health Expenditures

Contact:  Anne Verano (202) 690-6145
January 29, 1993

       America's health expenditures continued a trend of double-
digit growth in calendar year 1991 and reached $751.8 billion, up
11.4 percent from the 1990 level.
       The increase marked the fourth consecutive year in which
health spending grew at a rate exceeding 10 percent.  It was the
second consecutive year of growth exceeding 11 percent.
       The nation's health expenditures in 1991 amounted to an
estimated average of $2,868 for every person in the country.
       The cost of government health programs grew 15.7 percent
in 1991; payments of private health insurance premiums by
business, other organizations and individuals increased 10
percent; and consumers' out-of-pocket spending rose 5.7 percent
to cover costs not met by government or private health plans.
       The data released today by HHS Secretary Donna E. Shalala
are in an annual report that will be published in the winter
edition of Health Care Financing Review, the quarterly journal of
the Health Care Financing Administration.
       According to the report, the share of the economy claimed
by health spending increased faster in 1991 than at any time in
the past 30 years, an effect produced by sluggish economic growth
in combination with the rapid growth of health care costs.
       National health spending in 1991 accounted for 13.2
percent of the gross domestic product -- the total value of goods
and services produced in the United States -- up from 12.2
percent in the previous year.
       Although national health expenditures include research,
administration and construction costs, 88 percent of the total is
for personal health care services and products.  These personal
health expenditures in 1991 amounted to $660.2 billion, an
increase of 11.6 percent.
       Health expenditures consume increasing shares of
government budgets.  Federal spending on health in 1991 amounted
to 16.7 percent of total federal expenditures, up from 15.3
percent in 1990. As a percent of state and local spending, health
expenditures claimed 14.1 percent in 1991 and 12.9 percent in
1990.
       A third of America's personal health care spending in
calendar year 1991 was financed by the Medicare program for the
elderly and disabled and the Medicaid program for the poor. 
These programs accounted for two-thirds of all government
spending on health care.
       Spending on Medicaid program benefits, for which costs are
shared by the federal and state governments, increased 34.4
percent in calendar year 1991 to reach $96.5 billion.

       Medicaid costs increased rapidly when enrollments,
affected by economic recession and legislation that expanded
eligibility, jumped from 25.3 million in 1990 to 28.3 million in

1991.  The spending was accelerated by states' use of special
provider taxes and donations that swelled the flow of federal
funds to their growing Medicaid programs.

       The federal Medicare program spent $120.2 billion for
benefits in calendar year 1991, an increase of 10.9 percent from
the 1990 level.
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EDITOR'S NOTE: The Health Care Financing Administration, an
agency of the U.S. Department of Health and Human Services,
directs the Medicare and Medicaid programs, which help pay the
medical bills of more than 67 million Americans.  HCFA's
estimated FY 1993 expenditures are $230 billion, the 12th largest
government budget of any kind in the world.