Medicare expenditures were up 8.6 percent in 2008 to a total of $469.2 billion, following growth of 7.1 percent in 2007. ––Fee-for-service (FFS) Medicare spending jumped 5.3 percent, compared with the growth rate of 3.8 percent in 2007, caused in part by accelerated spending for hospitals, the report said. ––Medicare managed care spending rose 21.3 percent, similar to the 22.1 percent growth in 2007, as more beneficiaries switched from traditional FFS to Medicare Advantage plans. ––Prescription drug spending increased 10.0 percent to $51.5 billion.

Other highlights in the report: ––National health spending grew 4.4 percent in 2008, to $2.3 trillion or $7,681 per person, the slowest rate of growth since the government began tracking expenditures in 1960. The rate was down from 6 percent in 2007, as spending slowed for nearly all health care goods and services, particularly for hospitals.

––Still, health care spending continued to outpace overall national economic growth. As a share of the gross domestic product, health spending reached 16.2 percent in 2008, up 0.3 percentage points from 2007.

––Health spending growth by state, local, and private sources slowed in 2008, while federal health spending accelerated, including a temporary 27-month increase in the federal Medicaid share, which shifted approximately $7 billion from states to the federal government for the last quarter of 2008.

––Private health insurance premiums grew 3.1 percent in 2008, down from 4.4 percent growth in 2007. Benefit payment growth also slowed to 3.9 percent in 2008 from 4.8 percent in 2007. The recession had a big influence on these downward trends: more individuals without jobs could not afford coverage, plan enrollments declined, plus there was a decline in the ratio of the net cost of private health insurance (the difference between premiums and benefits) to total private health insurance premiums.

––Out-of-pocket spending grew 2.8 percent in 2008, far below the growth rate of 6 percent in 2007. The decline was due to less personal spending for retail prescription drugs and for physician and clinical services.

The CMS report is posted at http://www.cms.hhs.gov/NationalHealthExpendData/02_NationalHealthAccountsHistorical.asp#TopOfPage