National Health Spending to Exceed $10,000 Per Person for First Time

Health care spending projected to account for one-fifth of economy by 2025

July 18, 2016

National health spending is projected to exceed $10,000 per person for the first time in 2016, according to an announcement from federal health officials.

National health expenditures will hit $3.35 trillion this year, which is up 4.8 percent from 2015, according to a paper written by officials at the Centers for Medicare and Medicaid Services.

Officials project that health spending growth from 2015 to 2025 will average 5.8 percent, which will exceed growth in gross domestic product by 1.3 percent. Currently, health care spending represents 17.5 percent of the economy. Health care spending is projected to account for just over one-fifth, or 20.1 percent, of the entire economy in 2025.

"Following the initial effects of the Affordable Care Act (ACA) on health care spending and insurance coverage, increases in economic growth, faster growth in medical prices, and population aging are expected to be the primary drivers of national health spending and coverage trends over the next decade," the paper states.

Health spending is projected to accelerate from 2017 to 2019 due to faster growth in health care prices as well as growth in Medicare spending due to aging Baby Boomers who are expected to use services more often.

The paper also finds that health insurance enrollment is set to decline. "Growth in enrollment is projected to slow to 2.2 percent in 2016 (from an average of 8.9 percent in 2014-15)," officials said.

"The Affordable Care Act continues to help keep overall health spending growth at a modest level and at a lower growth rate than the previous two decades," said Andy Slavitt, the acting administrator of the Centers for Medicare and Medicaid Services. "This progress is occurring while also helping more Americans get coverage, often for the first time."

"Per-capita spending and medical inflation also remain at historically very modest levels, demonstrating the importance of continuing to reform our delivery systems," Slavitt said. "As we look to the future we must continue our efforts that keep people healthy, providing access to affordable, quality care, while spending smarter across all categories of care delivery."

"It’s absolutely insulting for this administration to say that the Affordable Care Act is keeping the growth rate for health spending at a ‘modest level,’ said Nathan Nascimento, senior policy adviser to Freedom Partners. "While this administration continues to turn a blind eye to the harmful impacts of this failed law, the reality is that health spending is now projected to represent one-fifth of our country’s total GDP in less than a decade."

"At a time when our national health spending now tops $10,000 per year for every living person, the truth is plain to see—there’s nothing affordable about the Affordable Care Act," Nascimento said. "The administration can keep spinning the public all it wants about Obamacare, but Americans aren’t buying it."

Published under: Health Care , Obamacare