Nursing home spending growth slows in 2006 due to states' efforts

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Nursing home spending growth is believed to have slowed last year and is expected to remain steady over the next few years, according to the Centers for Medicare & Medicaid Services.

Growth decelerated to 3.4 % in 2006 from 6% in 2005 as a result of states' efforts to control long-term care costs in their Medicaid programs, CMS estimated. Many states implemented new rules on asset transfers and other provisions. Growth is expected to remain steady at about 5% from 2007 through 2010, CMS said. It then is expected to gradually accelerate to about 5.5% by 2016.

Economists at the Office of the Actuary at CMS predicted that overall healthcare expenditures are expected to double to $4.1 trillion by 2016, consuming almost 20% of gross domestic product. This is expected to occur despite the fact that growth in U.S. healthcare spending slowed slightly in 2006 for the fourth straight year.

The report, "Health Spending Projections Through 2016: Modest Changes Obscure Part D's Impact," is available at http://healthaffairs.org/.