Record-High Health Care Spending Hits $3.2 Trillion in 2015

Growth due to Obamacare, Medicaid, and Medicare

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Health care spending in the United States grew 5.8 percent in 2015, hitting a record high of $3.2 trillion, according to the latest estimates from the Centers for Medicare and Medicaid Services.

Last year, health care spending in the United States totaled $3 trillion—or $9,523 a person. This year, per-person expenditures went up to $9,990.

“The faster growth in 2014 and 2015 occurred as the Affordable Care Act expanded health insurance coverage for individuals through Marketplace health insurance plans and the Medicaid program,” the report said.

The federal government is the biggest driver of health care spending and in 2015, 29 percent of the nation’s health care bill was due to the feds.

“Federal government spending on health increased 8.9 percent in 2015 after growing 11.0 percent in 2014, and outpaced all other sponsors of health care in both years,” the report said. “In 2015, the federal government was the largest sponsor of health care at 29 percent, up from 28 percent in 2014 and 26 percent in 2013.”

More than a third of total health care spending in 2015 was due to Medicare and Medicaid. Medicare cost the federal government $646.2 billion and Medicaid cost $545.1 billion, for a combined total of $1.2 trillion. Private health insurance spending totaled $1.1 trillion in 2015.

After the federal government, households were responsible for the next largest share of health care spending. These individuals spent the most on out-of-pocket spending that went to copayments, deductibles, and coinsurance. Total out-of-pocket spending in 2015 hit $338.1 billion and increased by 2.6 percent this year.

Private businesses paid 20 percent of the nation’s health care bill and more than three-quarters of their money went to premiums for health insurance for their employees. Costs for premiums in 2014 and 2015 to cover employees went up 4.9 percent each year on average.

In 2015, health care spending was responsible for a 17.8 percent share of the United States’ gross domestic product, up from 17.4 percent in 2014. According to the report, health care spending is set to increase in the next decade.

“While the 2014-2015 period is unique, given the significant changes in health insurance coverage that took place, health spending is projected to increase as the share of the overall economy over the next ten years and will be influenced by the aging of the population, changing economic conditions, and faster medical price growth,” the report said.

Andy Slavitt, acting administrator at the Centers for Medicare and Medicaid Services, said that the growth in health care spending is “modest.”

“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 Affordable Care Act,” Slavitt said. “As millions more Americans have obtained health insurance, per-person cost growth remains at historically modest levels.”

Ali Meyer

Ali Meyer   Email Ali | Full Bio | RSS
Ali Meyer is a staff writer with the Washington Free Beacon covering economic issues that expose government waste, fraud, and abuse. Prior to the Free Beacon, she was a multimedia reporter with CNSNews.com where her work appeared on outlets such as Drudge Report and Fox News. She also interned with the Heritage Foundation and Pacific Research Institute. Her Twitter handle is @DJAliMeyer, and her email address is meyer@freebeacon.com.

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