US health spending grew at fastest rate of Obama years

With 65.9 million people now enrolled in private health plans or Medicaid, spending on hospitals, doctors, drugs, and other health-care items hit $3 trillion in 2014, the largest increase since President Barack Obama took office, according to a report by government actuaries.

Overall, healthcare spending grew 1.2 percentage points faster than the overall economy in 2014, resulting in a 0.2 percentage-point increase in the health spending share of gross domestic product – from 17.3 percent to 17.5 percent. “Millions of uninsured Americans gained health care coverage in 2014”, Slavitt said, adding, “And still, the rate of growth remains below the level in most years prior to the coverage expansion, while out-of-pocket costs grew at the fifth lowest level on record” (The Hill, 12/2).

The increase “is not surprising, given that more people are covered and getting the health care they need”, Richard Frank, an economic adviser, said in a statement.

Over the coming years the rate of health care spending growth will, appropriately, attract great scrutiny. The last recession, which began in December 2007 and continued until mid-2009, slowed health spending, as many people lost income and job-based coverage.

Healthcare consumers have received over $2.4 billion premium rebates since 2011, confirmed a press release earlier this month from the Centers for Medicare & Medicaid Services (CMS). The trend is largely due to the expansion of Obamacare and Medicaid coverage along with a shocking increase in the cost of biologic specialty drugs like Sovaldi for the treatment of the potentially deadly hepatitis C virus. “However, it is unknown how these drivers of healthcare spending will affect trends over the next few years as the new health insurance landscape continues to evolve”. Enrollment in private insurance plans rose by 2.2 million people in 2014, and 7.7 million more people signed up for Medicaid that same year, which boosted the programs spending by 11 percent.

“Additionally, the introduction of new hepatitis C drugs contributed to rapid growth in retail prescription drug expenditures, which increased by 12.2 percent in 2014”.

About 6.3 million people who were newly eligible for Medicaid entered the program in 2014. And households’ total health spending, including insurance premiums, fell as a share of national health spending.

Moreover, he said, despite extenuating circumstances such as soaring drug prices, the jury may be out for years in gauging the long-term fiscal impact of increased government involvement in the health care system, such as the Affordable Care Act. “After growing 3 per cent in 2013, Medicare spending grew 5.5 per cent in 2014”.

The country spent $9,523 per person on health careThe country spent $9,523 per person on health care in 2014, including MedicareThe country spent $9,523 per person on health care in 2014, including Medicare, MedicaidThe country spent $9,523 per person on health care in 2014, including Medicare, Medicaid and private health insuranceThe country spent $9,523 per person on health care in 2014, including Medicare, Medicaid and private health insurance. Making prescription drugs more affordable is the public’s highest health care priority, according to polling by the Kaiser Family Foundation.

By contrast, healthcare spending grew at an average annual clip of 3.7 percent.