National Health Spending Grows Faster In 2015

A new analysis from the Office of the Actuary at the Centers for Medicare and Medicaid Services (CMS), published as a Web First by Health Affairs, estimates that in 2015 health care spending in the United States grew at a rate of 5.8 percent and reached $3.2 trillion, or $9,990 per person.

In 2014 spending increased 5.3 percent, which followed five consecutive years of historically low growth from 2009 to 2013. Faster growth in 2014 and 2015 occurred as Affordable Care Act (ACA) provisions expanded coverage for individuals through Marketplace plans and the Medicaid program.

Share of Gross Domestic Product Increases to 17.8 Percent

Health spending's share of the nation's gross domestic product (GDP) was 17.8 percent in 2015, up from 17.4 percent in 2014. Coverage expansions that began in 2014 as a result of the ACA helped increase the percentage of the population with health insurance from 86.0 percent in 2013 to 90.9 percent in 2015.  This expansion of coverage continued to affect health spending growth in 2015.

Faster growth in total health care spending was primarily due to accelerated growth in spending for private health insurance (7.2 percent), hospital care (5.6 percent), and physician and clinical services (6.3 percent). While Medicaid spending and retail prescription drug spending grew at a slower rate than in 2014, continued strong growth in both contributed to overall health care spending growth in 2015.

On a per capita basis, national health spending grew at 5.0 percent, reaching $9,990 in 2015. Changes in the age and sex mix of the population accounted for 0.6 percent of the growth in per capita health spending. Increases in medical prices and residual use and intensity of health care goods and services accounted for 1.2 percent and 3.2 percent of the growth, respectively.

Health Spending Projected to Increase

"Over the last fifty-five years, the largest increases in health spending's share of the US economy have typically occurred around periods of economic recession," said Anne B. Martin, an economist in the CMS Office of the Actuary and first author of the Health Affairs article. "While the 2014 and 2015 increases occurred more than five years after the nation's last recession ended, they coincided with 9.7 million individuals gaining private health insurance coverage and 10.3 million more people enrolling in Medicaid coverage. An additional contributing factor is the rapid growth in retail prescription drug spending."

While 2014–15 is unique given the significant changes in health coverage that have taken place, health spending is projected to increase as a share of the overall economy in the decade ahead. It will be influenced by the aging of the population, changing economic conditions, and faster medical price growth.

This study will also appear in the January 2017 issue of Health Affairs.

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