Annual Healthcare Spending Predicted to Grow Through 2025

HealthDay News — Health care spending is expected to grow at an average annual rate of 5.6% from 2016 to 2025, according to a report published online in Health Affairs.

Sean P. Keehan, from the US Centers for Medicare and Medicaid Services in Baltimore, and colleagues address national health expenditure projections for 2016 to 2025.

The researchers note that for 2016 to 2025, national health expenditures are expected to grow at an annual rate of 5.6%; by 2025, expenditures are expected to represent 19.9% of the gross domestic product. National health expenditure is expected to have decreased 1.1% to 4.8% for 2016, resulting from slowing in Medicaid and prescription drug spending growth. Faster projected growth in medical prices is expected to be offset partially by slower projected growth in the use and intensity of medical goods and services for the rest of the projection period, relative to that seen in 2014 to 2016 in association with coverage expansions resulting from the Affordable Care Act. From 2015 to 2025, the insured share of the population is expected to increase from 90.9% to 91.5%.

“This analysis finds that under current law and following the recent significant period of transition associated with coverage expansions, health care enrollment and spending trends are projected to revert to being fundamentally driven by changes in economics and demographics,” the authors write.

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Keehan SP, Stone DA, Poisal JA, et al. National health expenditure projections, 2016-25: price increases, aging push sector to 20 percent of economy [published online February 2017]. Health Affairs. doi: 10.1377/hlthaff.2016.1627