CMS: Health Care Spending to Grow 5.8% Per Year through 2025
The Centers for Medicare & Medicaid Services’ (CMS) Office of the Actuary (OACT) project total health care spending growth in the US between 2015-2025 to average 5.8% and represent 20.1% of the total economy by 2025, according to a new report.
The overall national health expenditures have reached an estimate $3.2 trillion in 2015. However, the projected national health spending growth remains lower than the average, nearly 8%, over the previous two decades before 2008. Authored by CMS OACT, the new report’s findings were published as a “Web First” in Health Affairs.
Andy Slavitt, CMS Acting Administrator said in a press release, “The Affordable Care Act continues to help keep overall health spending growth at a modest level and at a lower growth rate than the previous two decades. This progress is occurring while also helping more Americans get coverage, often for the first time.”
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CMS projects health spending will grow 1.3 percentage points faster than Gross Domestic Points (GDP) per year between 2015-2025. As a result, health share of the GDP is estimated to rise to 20.1% in 2025 from 17.5% in 2014. It is estimated that federal, state and local governments are projected to finance 47% of nation health spending.
Other findings included in the report were the following:
- the insured share of the population is estimated to continue to grow from 89% in 2014 to 92% in 2025;
- private health insurance expenditures are estimated to have increased by 5.1% from 2014 to 2015, reaching $1.0 trillion;
- due to increased enrollment, in 2015, Medicare expenditures are expected to have been $647.3 billion, a 4.6% increase from 2014; and
- prescription drug spending is projected to grow an average of 6.7% per year for 2016 through 2025.
Slavitt continued, “Per-capita spending and medical inflation also remain at historically very modest levels, demonstrating the importance of continuing to reform our delivery systems. As we look to the future we must continue our efforts that keep people healthy, providing access to affordable, quality care, while spending smarter across all categories of care delivery.”
-Julie Gould
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