The Centers for Medicare and Medicaid Services report that healthcare spending in the United States is expected to grow 7.3% in 2006 and exceed $2 trillion. Final 2005 figures are expected to show a 7.4% increase last year. Though growth in healthcare spending is decelerating, with 2004 growth at 7.9%, overall spending has still increased significantly each year in total dollar terms.

The deceleration currently witnessed is likely due to decreased personal healthcare spending and legislated Medicare payment adjustments that are to be implemented in 2007 will likely decrease personal spending even further. Projected spending growth for that year is 7.0%. In the longer term, the next decade is expected to bring a doubling of national healthcare spending, bringing healthcare spending to 20% of Gross Domestic Product (GDP) by 2015.

Meanwhile, healthcare costs for employers have reportedly decreased for each of the past four years, most likely due to continued and aggressive efforts to stem costs. According to a survey conducted by Watson Wyatt Worldwide and the National Business Group on Health, employers are expecting that their healthcare costs will increase 8% this year, as opposed to an expectation of 10% increases in 2005.

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