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Health care spending rose modestly in 2015



December 26, 2016
Area(s) of Interest: Health Care Reform 

In 2015, per-capita health care spending grew by 5 percent and overall health spending grew by 5.8 percent, according to a new study by the Office of the Actuary at the Centers for Medicare and Medicaid Services. While overall expenditures increased, the rate of growth is still substantially lower than the 9 percent average rate seen in the three decades before 2008. On a per-enrollee basis, overall spending increased in 2015 by 4.5 percent for private health insurance, 1.7 percent for Medicare and 3.8 percent for Medicaid.

According to the report, 2015 expenditure growth was primarily the result of increased use and intensity of services as millions gained health coverage, as well as significant growth in spending for retail prescription drugs. With new expensive specialty drugs hitting the market, prescription drug spending increased 9 percent in 2015, lower than the 12.4 percent growth in 2014, yet significantly higher than the 2.3 percent growth in 2013. 

Health care spending in 2015 grew 2.1 percentage points faster than the overall economy, resulting in a 0.4 percentage-point increase in the health spending share of gross domestic product (GDP) – from 17.4 percent in 2014 to 17.8 percent in 2015. In the decade prior to the passage of the Affordable Care Act (ACA; 2000-2009), health care spending increased an average of 2.8 percentage points faster than GDP, on an annual basis.

Spending on physician and clinical services increased 6.3 percent in 2015. This was an acceleration from growth of 4.8 percent in 2014 and was the first time since 2005 that the growth rate exceeded 6 percent. Price growth for physician and clinical services, however, declined 1.1 percent in 2015, driven by the expiration of temporary increases in Medicaid payments to primary care physicians.

The report noted that over a two-year period, 20 million individuals either gained private health insurance coverage or enrolled in the Medicaid program, primarily as the result of the ACA. The share of the population with health coverage increased from 86 percent in 2013 to 90.9 percent in 2015.

Click here for more highlights from the report.

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