The growth rate of U.S. health care spending over the next decade is likely climb faster than it has since the Great Recession, according new government projections published Tuesday. And as the growth rate creeps higher, by 2024 nearly 20 percent of spending in the U.S. economy — one dollar in every five — will be related to health care, up from 17.4 percent in 2013.
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As it is, health care spending reached an estimated $3.1 trillion last year, or nearly $9,700 per person. That represents an increase of 5.5 percent, the first time since 2007 that spending growth has topped 5 percent.
To experts in the economics of health care, the findings in the new paper by a team of economists and actuaries from the Centers for Medicare and Medicaid Services are still modestly encouraging. Despite the addition of millions of people to the health care system under the Affordable Care Act, the rate of spending growth doesn’t appear to be headed back toward pre-recession rates. For the next decade and more, the annual growth rate will stay at around 5.8 percent, well below the 9 percent annual increase that was standard in the years prior to the Great Recession.
Among the forces expected to drive health spending higher are expanded coverage as a result of Obamacare, rising prices and an improving economy, along with an aging population, that both mean more people will be seeking medical care.
If the U.S. didn’t already outpace every single developed country on the planet in health spending as a percentage of GDP, this uptick in the spending growth rate might not be the worst news. It might also be okay if the U.S. consumer, dollar for dollar, got more out of money spent on health care than folks in other countries. But alas, that doesn’t seem to be the case either.
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Under the CMS economists’ projections, published in the journal Health Affairs, part of the reason why health care spending increases won’t revert to their pre-recession levels is that cost sharing — the amount people going to the doctor need to pay for their care — is expected to increase in coming years. That means that as going to the doctor becomes more expensive, people are expected to go less.