WASHINGTON-Growth in USA health-care spending is accelerating after reaching historic lows, a pickup largely attributed to the millions of Americans who have gotten health coverage under the Affordable Care Act.
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Overall spending per-enrollee in private health insurance plans, which includes those sold on government-run Obamacare exchanges, grew by 3.2 percent in 2014.
After five years of historically low growth, national health expenditures increased by 5.3 percent in 2014, reaching $3 trillion, or $9,523 for every man, woman and child.
“It’s safe to say spending would have been higher if more states had expanded”, Micah Hartman, statistician in the National Health Statistics Group with the Office of the Actuary at CMS, said during an event Wednesday hosted by Health Affairs at the National Press Club. “We are pleased that the tools created under the health care law are working as meant to give consumers access to high-quality health insurance coverage and keep cost affordable”. “Faster growth in aggregate spending due to rising coverage will be temporary and will fade in the coming years”. Per enrollee private health insurance spending increased 3.2 percent in 2014. Faster growth in spending, from 5.9 percent growth in 2013 to 11.0 percent in 2014, was driven by ACA-related eligibility expansion as twenty-six states plus the District of Columbia provided coverage for individuals with incomes of up to 138.0 percent of the federal poverty level. The federal government’s funding of newly eligible Medicaid enrollees is decreasing over time, but by law will go no lower than 90 percent of total costs. The companies can’t spend more than 20% on administrative costs. For several years analysts have expected an increase in 2014 of roughly the amount reported today.
That 12.2% increase – the biggest in well over a decade – was fueled by increased spending on new specialty medicines, especially those used to treat hepatitis C. New hepatitis C treatment contributed $11.3 billion in new spending, according to the report.
Hospital spending rose 4.4 percent, boosted by the larger number of insured patients using hospital services, the report stated. In 2014, healthcare spending grew at a pace that was 1.2 percentage points faster than the economy and now represents 17.5 percent of the nation’s GDP.
Hospital spending (4.1 percent) expenditures reached $971.8 billion in 2014, an increase of 4.1 percent, which was higher than the growth of 3.5 percent for the previous year.
Overall, government and private health insurance were the source of almost three quarters of the health spending.
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This study will also appear in the January 2016 issue of Health Affairs.
