National health spending experienced a boom during 2014 and it is expected that throughout the next decade, the increasing trend will continue.
Until 2014, national health spending had reached historic low levels. As the baby boomer generation is now their 70s and consequently benefit more from Medicare and as insurance coverage expanded with the enactment of the 2010 health law, coupled with economic revival, it results that America is spending more on health.
Tuesday, federal actuaries announced that in 2014, all health care spending saw an increase of 5.5 percent in spending, while 2015 is estimated to see a spending increase of 5.3 percent. The data was published from actuaries at the Medicaid and Medicare Centers and features in the Health Affairs journal.
The same data indicates that during the next decade, through 2024, all health care spending is expected to grow by 5.8 percent on average, with the peak growth visible in 2020 and calculated at 6.3 percent.
The increase in overall health care spending is a marking point after for the past five years, the growth was steady at under 4 percent. According to CMS actuaries, the spike was expected, as in 2014 it was already predicted that 2014 will witness a 5.6 percent growth, a 2015 4.9 percent growth and a decade growth calculated up to 2024 of 5.7 percent.
One key factor in the health care spending growth was represented by prescription drugs. Particularly new specialized drugs like Sovaldi, that targets Hepatitis C and entered the U.S. market in 2014 drove the increase in this sector.
Overall, pharmaceutical products drove an increase of 12.6 percent in 2014, 10.1 percent more than in 2013. Medical bills are now weighing more on consumers, as they are participating more in the costs.
By the end of the forecasted period, the actuaries reported that state governments and Washington will participate in paying U.S. citizens health bills by 47 percent.
Albeit the number of U.S. citizens that are insured decreased by 8.4 million in 2014 comparative to 2013, the increased use of medical services and the Affordable Care Act contributed to the growth of health care spending.
By 2024, analysts are predicting that health care will represent one fifth of U.S. economy. If the spending growth continues as such, reaching 5.7 percent by 2024, it will surpass GDP growth by 1.1 percent.
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