U.S. health spending always grows but it grew at an especially fast rate last year as more people got health insurance for the first time and as pricey new hepatitis drugs hit the market.
The annual medical spending report from the federal government shows the country spent $3.2 trillion on health care in 2015, 5.8 percent more than in 2014.
This adds up to close to $10,000 per person — $9,990 to be precise, far more per capita than in any other comparable country.
“Health care spending grew 2.1 percentage points faster than the overall economy in 2015,” the team at the Office of the Actuary at the Centers for Medicare & Medicaid Services (CMS) reported Friday.
Health spending also grew rapidly last year and much of it’s because so many more people have health insurance than before, CMS said. There are indications that people who’d been sick for some time were seeking medical care for the first time, said CMS’s Aaron Catlin, who worked on the report.
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“Following five consecutive years of historically low growth, from 2009 through 2013, health spending growth accelerated in 2014 (to 5.3 percent) and 2015 (to 5.8 percent),” the team wrote in their report, published in the journal Health Affairs.
“The faster growth in 2014 and 2015 occurred as the Affordable Care Act (ACA) expanded health insurance coverage for individuals through Marketplace health insurance plans and the Medicaid program.”
“Private health insurance spending increased 7.2 percent in 2015."
CMS says 20 million Americans have health insurance because of the ACA, widely known as Obamacare. Roughly half have bought private health insurance on the Obamacare exchanges and half have coverage in the states that agreed to expand their Medicaid programs.
Now 90 percent of Americans have health insurance coverage.
Obamacare has been under fire because of rising health insurance premiums, and Republicans in Congress have repeatedly voted to repeal it. President-elect Donald Trump at first said he’d repeal it but now says he would ask Congress to keep many of its provisions.
Trump's nominee as Health and Human Services secretary, Georgia rep. Tom Price, has been an Obamacare opponent while his nominee to head CMS, which administers the ACA, is health consultant Seema Verma. Verma helped negotiate a custom-made expansion of Medicaid in Indiana.
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The federal government currently foots the whole bill for Medicaid expansion, and that helped fuel the growth in federal health spending, the report showed.
“The acceleration in total health care spending growth in 2015 was primarily driven by faster growth in spending on private health insurance, hospital care, and physician and clinical services,” the report reads.
“Private health insurance spending increased 7.2 percent in 2015 (up from 5.8 percent in 2014).”
In all, private health insurance, which accounts for one-third of all health spending, reached $1.1 trillion last year.
Americans spent $338 billion of their own money on health care, up 2.6 percent from 2014, the report found.
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Spending on prescription drugs grew at an especially high rate — up 9 percent over 2014 for a total of $324.6 billion.
“Recent rapid growth was due to increased spending for new medicines (particularly for specialty drugs such as those used to treat hepatitis C), price growth in existing brand-name drugs, increased spending on generics, and a decrease in the number of expensive blockbuster drugs whose patents expired,” the report read.
“Recent rapid growth was due to increased spending for new medicines (particularly for specialty drugs such as those used to treat hepatitis C)."
Catlin named two specific drugs helping drive that increase: Sovaldi, knowns generically as sofosbuvir, and Harvoni, a combination pill that includes Sovaldi. Both are made by the drug company Gilead.
“Last year it would have been Sovaldi,” Catlin told reporters. “This year it would have been Harvoni.”
Sovaldi costs about $84,000 for a weeks-long regimen that can cure someone of hepatitis C. Harvoni costs more than $94,000 for similar treatment.
Hepatitis C affects about 3.2 million Americans, once killing more than 15,000 each year. Gilead argues that the expensive cure costs less than treating a patient for a lifetime with less effective drugs.
