Feds: U.S. health spending increases by 6.7% to $2.1 trillion

According to the federal government, a 6.7% increase in the country's health spending in 2006 was fueled by seniors and the disabled using their new Medicare drug cards to purchase prescription drugs. (Source: "Drug Spending Raises US Health Care Tab," Associated Press, Jan. 7, 2008.) Overall, the United States spent $2.1 trillion spent on health care in 2006, an average of $7,026 per person. Health care represents 16.1% of the nation's total economy.

Spending in most areas of health care did not increase as mush as in the previous year, but spending on prescription drugs increased 8.5 % during the first year of the Medicare drug benefit (compared to 5.8% the year before). Despite this increase, nearly two out of every three prescriptions filled were generics, which helped restrain drug expenditures, while prices also remained relatively stable for many brand-name drugs. But because people with health insurance are more likely to access the health care system, the Medicare drug benefit enabled people who had not used or had cut back on medicine to fill more prescriptions.