WASHINGTON (FRONTLINE MEDICAL NEWS) – Health insurance enrollment, which includes private insurance, Medicare, and Medicaid, reached 91.1% of the U.S. population in 2016, the highest level ever recorded, Micah Hartman and colleagues in the office of the actuary at the Centers for Medicare & Medicaid Services reported.
National health spending amounted to $3.3 trillion or $10,348/person, a 4.3% increase in 2016, a new analysis from the office of the actuary at the Centers for Medicare & Medicaid Services found. This was a slower rate of growth than the 5.8% growth in 2015 because of slower insurance enrollment and declines in spending for services and retail prescription drugs.
The rate of growth for physician and clinical services declined to 5.4% in 2016 because of decreases in Medicaid and Medicare rates and declines in the use and intensity of services. Medicaid, private health insurance, and declines in the use and intensity of hospital services drove a lower rate of growth in hospital spending for 2016 at 4.7%, compared with growth of 5.7% in 2015.
The growth in spending on prescription drugs in 2016 declined significantly – 1.3% in 2016 vs. 8.9% in 2015. The actuaries attributed the much slower rate of growth to a decline in spending on hepatitis C drugs, fewer new drugs being brought to market, and slower overall growth in prices for both brand-name and generic drugs (Health Affairs. 2017. doi: 10.1377/hlthaff.2017.1299).
The nation’s health bill consumed 17.9% of Gross Domestic Product, up from 17.7% in 2015, Mr. Hartman said at a press briefing on the data. Private health insurance paid for 35% of spending, Medicare paid for 21%, Medicaid paid for 17%, CHIP/Department of Defense/Department of Veterans Affairs paid for 4%, and other third-party payers paid for 10%. Out of pocket expenses accounted for 11% of national health expenditures.
The slower increase in the rate of spending in 2016 follows a growth period in 2014 and 2015 associated with the full implementation of the Affordable Care Act and its Medicaid expansion, which drove increases in health insurance enrollment and health spending, Mr. Hartman said. During those years, 8.7 million people gained private health insurance and 10.2 million gained Medicaid coverage; there was also rapid growth in retail prescription drug spending, particularly on hepatitis C medications.
“Over the last decade, the [United States] has experienced unique events that have affected the health care sector, including the most severe economic recession since the Great Depression, major changes to the health care system because of the ACA, and historic lows in medical price inflation,” Mr. Hartman said in a statement.
Total spending by private health insurance hit $1.1 trillion, an increase of 5.1%, down from the 6.9% increase during 2015. Private insurance had higher net costs in 2016 despite slower growth in hospital and prescription drug spending.
Medicare spent $672.1 billion, with fairly stable enrollment growth, while Medicaid had a decrease in enrollment growth and spent $565.5 billion.
In keeping with trends from previous years, the federal government and U.S. households paid for an equal share of health care in 2016 at 28% each.