Fed big spender, as prescription drugs drive increases

U.S. health care spending in 2015 grew by 5.8 percent, reaching $3.2 trillion; on a per capita basis, spending on health care increased 5 percent to $9,990, according to researchers at the Office of the Actuary at CMS in a new National Health Expenditures report. As a result, the share of gross domestic product devoted to health care spending was 17.8 percent in 2015, up from 17.4 percent in 2014. CMS noted that although millions of people gained coverage in part to the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148), per-enrollee spending growth in private health insurance and Medicare continued to be well below the average in the decade before passage of the ACA.

In 2015, the federal government accounted for the largest share of health care spending (29 percent), followed by households (28 percent), private businesses (20 percent), and state and local governments (17 percent). Hospital care accounted for the most spending based on type of service or product at 32 percent with physician and clinical services at 20 percent.

Retail prescription drug spending continued to grow faster than the overall spending growth, increasing 9 percent to $324.6 billion. Although the growth in 2015 was slower than the previous year, spending on prescription drugs still outpaced all other services in 2015.

Spending numbers 

Overall, private health insurance expenditures, which amounted to 33 percent of total health care spending, reached $1.1 trillion in 2015, and increased 7.2 percent in 2015. The faster rate of growth reflected increased enrollment in private health insurance associated with coverage expansions under the ACA, and a notable increase in the enrollment in employer-sponsored plans.

Medicare spending, which amounted to 20 percent of total health care spending, grew 4.5 percent to $646.2 billion in 2015, which was a slight deceleration from the 4.8 growth percent in 2014. The slightly slower growth in 2015 was largely attributable to slower growth in Medicare enrollment, which increased 2.7 percent to 54.3 million beneficiaries following 3.1 percent growth in 2014.

Medicaid spending, which accounts for 17 percent of total health care spending, slowed slightly in 2015 to 9.7 percent, but continued the growth that began in 2014 (11.6 percent). State and local Medicaid expenditures grew 4.9 percent while Federal Medicaid expenditures increased 12.6 percent in 2015. The latter increase was attributed to newly eligible enrollees under the ACA.

Out-of-pocket spending grew 2.6 percent in 2015 to $338.1 billion, slightly faster than the growth of 1.4 percent in 2014.