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Jerry Geisel

Researchers project health care spending to accelerate

September 3, 2014 - 4:38pm

Health Care Spending


Health care expenditures rose modestly in 2013, but cost increases could begin to accelerate this year and continue as the economy improves and key provisions of the health care reform law take effect, according to government research released Wednesday.

In 2013, total U.S. health care spending hit nearly $2.9 trillion, or $9,164 per person. While a record, expenditures rose only 3.6% in 2013, down from 3.7% in 2012, according to statistics compiled by researchers at the Centers for Medicare and Medicaid Services and published Wednesday in the journal Health Affairs.

That 3.6% cost increase is the lowest in the 54 years that government researchers have been tracking and compiling such information.

That modest increase in health care spending reflects several factors, including modertate economic growth, additional increases in health care plan cost sharing requirements and increases in employer adoption of high-deductible health care plans, the report said.

While the increase in health care spending in 2013 was the fifth consecutive year that annual cost increase remained below 4%, government researchers project that national health expenditures will jump by 5.6% in 2014 and 4.9% in 2015.

That acceleration in health care spending will be largely driven by provisions in the Patient Protection and Affordable Care Act through which, starting in 2014, millions of uninsured Americans have gained coverage, in public health insurance exchanges and Medicaid. In addition, economic growth also will accelerate the demand for health care services, the report said.

In 2014 alone, 9 million previously uninsured Americans gained new coverage, many of them beneficiaries of ACA-mandated premium subsidies to offset the cost of buying policies in public exchanges.

Health care expenditures are expected to rise in 2014 to 17.6% of the gross domestic product, up from 17.2% in 2013, according to the report.

 



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