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Health Care Costs 101: Spending Rose with More Coverage and Care

Katherine Wilson, Wilson Analytics

US health care spending continued its modest growth in 2015. This was due in part to increased use of services as enrollment in Medicaid and private insurance expanded.

Who Paid for Health Care over the Past 50 Years?

National health spending grew slightly in 2015, from 5.3% in 2014 to 5.8% in 2015. US health spending reached $3.2 trillion in 2015, or $9,990 per capita, and accounted for 17.8% of gross domestic product (GDP). The faster growth was due, in part, to coverage expansion under the Affordable Care Act (ACA) and increased spending on prescription drugs. Projections for 2016 through 2025 have health spending growth slowing slightly.

The Health Care Costs 101 series of reports, which relies on the most recent data available, details how much is spent on health care in the US, which services are purchased, and who is paying for what.

Key findings include:

  • Between 2016 and 2025, Medicare is expected to have the highest growth rate among payers as baby boomers age into the program. Medicaid spending is expected to slow in 2016 as enrollment stabilizes and hospital spending slows.
  • For the second year in a row, prescription drug spending was the fastest growing goods/service category, increasing by 9.0%, or $26.7 billion, in 2015.
  • Federal government spending grew 8.9% ($75 billion) in 2015, faster than spending by business, households, or state and local government. About half of the increase was spent on Medicaid.
  • Federal subsidies for ACA marketplace premiums and cost sharing accounted for 3% ($29.2 billion) of federal health spending.
  • Per capita health spending increased by 5.0% in 2015, up from 4.4% in 2014.

The full report, as well as a quick reference guide and all the charts found in the report, can be found under Document Downloads. Full reports with previous years' data are also available.

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The CHCF Almanac regularly publishes data and analysis on California's health care market.

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