U.S. healthcare spending in 2014 grew at a rate of 5.3% to $3 trillion, or $9,523 per person, according to a new analysis from the Centers for Medicare and Medicaid Services (CMS) in Health Affairs (December 2, 2015).
The previous five years saw historically low growth, which averaged 3.7%; in 2013, growth was 2.9%, according to CMS' Office of the Actuary.
Health spending's share of the nation's gross domestic product (GDP) also increased -- from 17.3% in 2013 to 17.5% in 2014. The acceleration in health spending growth in 2014 was primarily driven by coverage expansions under the Patient Protection and Affordable Care Act (ACA), particularly for private health insurance and Medicaid, as well as by rapid growth in spending on retail prescription drugs, fueled in part by new drug treatments for hepatitis C, CMS said.
The coverage expansions contributed to an 8.7 million person increase in health insurance coverage in 2014 compared with 2013. As a result, the insured share of the population increased from 86.0% in 2013 to 88.8% in 2014 -- the highest share since 1987.
Total private health insurance spending growth accelerated from 1.6% in 2013 to 4.4% in 2014. The growth rate reflected an additional net increase of 2.2 million people with private health insurance coverage and faster growth in 2014 benefit spending for prescription drugs, physician and clinical services, and hospital care, compared with 2013. Medicaid spending grew at a rate of 11.0% in 2014 compared with 5.9% in 2013. The 2014 growth rate reflected provisions of the ACA that expanded eligibility and enhanced payments to primary care providers. Total Medicaid enrollment increased by 7.7 million in 2014, due mainly to ACA expanded eligibility.
Due to the expansion of Medicaid eligibility, as well as health insurance premium tax credits and cost-sharing subsidies paid by the federal government, federal government healthcare spending grew 11.7% in 2014 -- 8.2 percentage points faster than in 2013. Correspondingly, the federal government's share of healthcare spending increased from 26% in 2013 to 28% in 2014.
The analysis will appear in the January 2016 issue of Health Affairs.
