In the Journals

CMS: US health spending reached $3.2 trillion in 2015

In 2015, the national overall and per-capita health expenditures increased by 5.8% and 5%, respectively, reaching $3.2 trillion, or $9,990 per person, according to a study by CMS published in Health Affairs.

“Following five consecutive years of historically low growth, from 2009 through 2013, health spending growth accelerated in 2014 (to 5.3%) and 2015 (to 5.8%),” Anne B. Martin, lead researcher from the office of the actuary at CMS, and colleagues wrote. “The faster growth in 2014 and 2015 occurred as the Affordable Care Act (ACA) expanded health insurance coverage for individuals through Marketplace health insurance plans and the Medicaid program.”

The researchers found that there was a 9% increase in prescription drug expenditures in 2015 that was lower than the growth in 2014 (12.4%), but significantly higher than the growth in 2013 (2.3%). Overall spending rose 4.5%, 1.7% and 3.8% for private health insurance, Medicare and Medicaid, respectively, on a per-enrollee basis.

The expansion of health care coverage to millions of Americans, as well as the continued strong growth in expenditures for retail prescription drugs are the primary causes of the national spending rise in 2015, according to researchers.

“Our significant progress in reducing the nation's uninsured rate, while providing strong protections for Americans if they get sick, would not be possible without the [ACA]," Andy Slavitt, CMS Acting Administrator, said in a press release. "As millions more Americans have obtained health insurance, per-person cost growth remains at historically modest levels.”

Coverage expansions, largely due to the ACA, enabled 20 million individuals to enroll in either private health insurance or Medicaid over the past 2 years which caused an upsurge in health care coverage from 86% in 2013 to 90.9% in 2015, according to the report.

The report also showed that the share of gross domestic product (GDP) for health care spending increased from 17.4% in 2014 to 17.8% in 2015.

The rise in expenditures for private health insurance (7.2%), hospital care (5.6%) and physician and clinical services (6.3%) greatly contributed to the faster growth in total health spending, according to Martin and colleagues. Strong growth in Medicaid (9.7%) and retail prescription drug spending (9%) were other factors that accelerated costs, even though their associated spending grew at a slower rate compared to 2014.

Furthermore, 1.2% of the growth in per capita health spending was a result of increases in medical prices and residual use, while intensity of health care goods and services was responsible for 3.2%.

“The health sector experienced dramatic changes in 2014 and 2015, as the main coverage provisions of the ACA were implemented,” Martin and colleagues concluded. “These changes played a major role in determining the overall growth in health spending, and they influenced the mix of payers and sponsors as well. While the 2014–15 period is unique, given the significant changes in health insurance coverage that took place, health spending is projected to increase as a share of the overall economy over the next 10 years and will be influenced by the aging of the population, changing economic conditions, and faster medical price growth.” – by Alaina Tedesco

For more information:

https://www.cms.gov/Newsroom/MediaReleaseDatabase/Press-releases/2016-Press-releases-items/2016-12-02.html

Disclosure: The researchers report no relevant financial disclosures.

In 2015, the national overall and per-capita health expenditures increased by 5.8% and 5%, respectively, reaching $3.2 trillion, or $9,990 per person, according to a study by CMS published in Health Affairs.

“Following five consecutive years of historically low growth, from 2009 through 2013, health spending growth accelerated in 2014 (to 5.3%) and 2015 (to 5.8%),” Anne B. Martin, lead researcher from the office of the actuary at CMS, and colleagues wrote. “The faster growth in 2014 and 2015 occurred as the Affordable Care Act (ACA) expanded health insurance coverage for individuals through Marketplace health insurance plans and the Medicaid program.”

The researchers found that there was a 9% increase in prescription drug expenditures in 2015 that was lower than the growth in 2014 (12.4%), but significantly higher than the growth in 2013 (2.3%). Overall spending rose 4.5%, 1.7% and 3.8% for private health insurance, Medicare and Medicaid, respectively, on a per-enrollee basis.

The expansion of health care coverage to millions of Americans, as well as the continued strong growth in expenditures for retail prescription drugs are the primary causes of the national spending rise in 2015, according to researchers.

“Our significant progress in reducing the nation's uninsured rate, while providing strong protections for Americans if they get sick, would not be possible without the [ACA]," Andy Slavitt, CMS Acting Administrator, said in a press release. "As millions more Americans have obtained health insurance, per-person cost growth remains at historically modest levels.”

Coverage expansions, largely due to the ACA, enabled 20 million individuals to enroll in either private health insurance or Medicaid over the past 2 years which caused an upsurge in health care coverage from 86% in 2013 to 90.9% in 2015, according to the report.

The report also showed that the share of gross domestic product (GDP) for health care spending increased from 17.4% in 2014 to 17.8% in 2015.

The rise in expenditures for private health insurance (7.2%), hospital care (5.6%) and physician and clinical services (6.3%) greatly contributed to the faster growth in total health spending, according to Martin and colleagues. Strong growth in Medicaid (9.7%) and retail prescription drug spending (9%) were other factors that accelerated costs, even though their associated spending grew at a slower rate compared to 2014.

Furthermore, 1.2% of the growth in per capita health spending was a result of increases in medical prices and residual use, while intensity of health care goods and services was responsible for 3.2%.

“The health sector experienced dramatic changes in 2014 and 2015, as the main coverage provisions of the ACA were implemented,” Martin and colleagues concluded. “These changes played a major role in determining the overall growth in health spending, and they influenced the mix of payers and sponsors as well. While the 2014–15 period is unique, given the significant changes in health insurance coverage that took place, health spending is projected to increase as a share of the overall economy over the next 10 years and will be influenced by the aging of the population, changing economic conditions, and faster medical price growth.” – by Alaina Tedesco

For more information:

https://www.cms.gov/Newsroom/MediaReleaseDatabase/Press-releases/2016-Press-releases-items/2016-12-02.html

Disclosure: The researchers report no relevant financial disclosures.