2017 Edition — Health Care Costs 101

Spending rose with more coverage and care

Katherine Wilson, Wilson Analytics


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Health spending in 2015 continued to grow modestly, following a period of historically low growth from 2009 to 2013. National health spending grew by 5.8% in 2015, up from 5.3% in 2014. From 2016 to 2025, health spending is projected to grow at an average rate of 5.6% per year. The spending increases in 2015 were driven by increased use of services as enrollment in Medicaid and private insurance expanded. 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 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. Health Care Costs 101: Spending Rose with More Coverage and Care, released in 2017, reports on data from 2015. (Visit CHCF’s interactive infographic to find out who has paid for health care over the past 50 years.)

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. Growth in 2015 prescription drug spending was somewhat lower than the 2014 increase of 12.4%.
  • In 2015, the ACA’s eligibility expansion continued to affect Medicaid spending, which increased 9.7%, a slower pace than 2014’s increase of 11.6%. On a per enrollee basis, however, increases slowed in 2014 as nondisabled adults gained coverage and created a healthier pool of insured people.
  • The federal government surpassed households to finance the largest share (29%) of health spending.
  • 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 ($38.5 billion) 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, all the charts in the report, a quick reference guide, and a data file are available for download below. These materials are part of CHCF’s California Health Care Almanac, an online clearinghouse for key data and analyses describing the state’s health care landscape. See our entire collection of current and past editions of Health Care Costs 101.