- The country's health spending grew at a rate of 5.8% in 2015, totaling $3.2 trillion ($9,990 million per person) compared to the 5.3% rate increase during 2014. In contrast, the years 2009 through 2013 saw "historically low" spending growth.
- That's according to a new analysis from the CMS' Office of the Actuary published in Health Affairs on Friday.
- The spending growth during 2014 and 2015 was attributed to the increase in the number of Americans with health insurance thanks to ACA provisions, which helped increase the percentage of the insured population from 86% in 2013 to 90.9% in 2015.
In 2015, spending growth accelerated by 7.2% for private health insurance, 5.6% for hospital care, and 6.3% for physician and clinical services, the findings show. More notably, spending on Medicaid expenditures grew by 9.7% and by 9.0% for retail prescription drugs. The latter two contributing factors may not come as a surprise. A recent American Hospital Association report revealed the increase in drug prices have had a impact on hospitals' budgets from 2013 to 2015 that had a moderate (56.9%) or severe (33.8%) impact. Also, ACA provisions have allowed states to expand their Medicaid programs, leading to more Americans having this coverage.
"On a per-enrollee basis, overall spending increased by 4.5% for private health insurance, 1.7% for Medicare, and 3.8% for Medicaid," CMS stated in a prepared statement.
Health spending will continued to grew over the next 10 years powered by the country's aging population, changing economic conditions, and faster increases in medical prices, the analysis states. “Over the last fifty-five years, the largest increases in health spending’s share of the US economy have typically occurred around periods of economic recession,” said co-author of the Health Affairs article Anne B. Martin, an economist in the CMS Office of the Actuary. “While the 2014 and 2015 increases occurred more than five years after the nation’s last recession ended, they coincided with 9.7 million individuals gaining private health insurance coverage and 10.3 million more people enrolling in Medicaid coverage."
The uptick in health expenditures in recent years will be a major contributor to the first annual shortfall in the U.S. federal budget since 2009, according to an August CBO report. CBO cited the aging population as the main driver of most spending increases, adding, "Projected spending for people age 65 or older in three large programs — Social Security, Medicare, and Medicaid — increases from roughly one-third of all federal noninterest spending in 2016 to about 40% in 2026."