Overall national healthcare spending is predicted to grow an average rate of 5.8 percent annually from 2014-2024, according to new data from the Centers for Medicare and Medicaid Services.
That is significantly below the 9 percent average rate recorded in the three decades before 2008, the agency notes. After six years of growth below 5 percent, national health spending is projected to have grown 5.5 percent in 2014, will grow to 5.3 percent in 2015, and will peak at 6.3 percent in 2020.
Although projected health spending growth is faster than in the recent past due to the combined effects of the Affordable Care Acts major coverage expansions, stronger expected economic growth, and population aging, it is still slower than the growth experienced over the last three decades prior to this most recent recession, finds the CMS Office of the Actuary, which annually releases healthcare spending projections.
Despite an increased number of Americans getting health coverage in 2014, medical price inflation was a mere 1.4 percent, reveals the CMS report. In addition, hospital, and physician and clinical serviceswhich make up the largest portions of medical pricesalso increased slowly at a 1.4 and 0.5 percent rate, respectively.
However, CMS Acting Administrator Andy Slavitt commented in a written statement that while growth in overall health spending remains modest even as more Americans are covered, many for the first time and per-capita spending and medical inflation are all at historically very modest levels, the country cannot be complacent and must implement smarter spending across all categories of care delivery so that we can sustain these results.
Towards that end, prescription drug spending alone increased 12.6 percent in 2014, the highest growth since 2002. And, approximately 19.1 million additional people are expected to enroll in Medicare over the next 11 years as more members of the Baby Boom generation reach the Medicare eligibility age.
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