Health care spending rose in 2015 by a 5.5 percent increase over 2014's spending, and that rate of increase is likely to rise in years to come.
That's according to Modern Healthcare, which reported that the U.S. health care system spent $3.2 trillion in 2015, or almost $10,000 for every person, according to the latest federal projections. The rate of increase in 2014 was 5.3 percent, and while a lot of that additional spending is due to more people being insured under the Affordable Care Act, the rate increase is not as high as in previous years.
However, government economists are predicting that health care spending is going to increase by an average of 5.8 percent annually for the next 10 years. And health care occupies more of a share of the economy than it ought, accounting for 17.8 percent of gross domestic product in 2015. That share, estimate actuaries from the Center for Medicare and Medicaid, will rise to 20.1 percent by 2025, thanks to more people aging into Medicare and needing more health care.
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Economists are concerned that the pace of health care spending isn't being adequately addressed — particularly since its rise means a drop in spending on other areas within the economy, such as education and transportation. And while it's expected that the rate of increase won't continue at quite the same pace once new enrollments thanks to the ACA level off, an influx of people on payrolls in the health care field has left some economists worrying that spending will continue to rise.
Medical price inflation "continued to grow at a historically low rate of 0.8 percent," the article quoted federal economists saying, but more people are actually paying for health care out of their own pockets rather than via medical coverage. Federal projections put at 10.6 percent the amount of national health expenditures coming not from insurers' coffers, but from individuals' personal resources. And that could rise as employers increasingly push workers toward high-deductible health plans.
Even if the annual growth rate of health care spending is down from what it was years ago, it's not a good sign for individuals or the economy. "It's a lower rate of spending (in 2015), but once you move that over to real spending net of inflation, it's still significantly above the growth of tax revenues and GDP and wage growth," Thomas Getzen, a health economist at Temple University in Philadelphia, was quoted saying. He added, "Even at 5.5 percent growth, if wages are going up 2.5 percent, you're in trouble."
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