February 15, 2017
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national health spending growth: Growth is projected to have been 4.8 percent in
2016, slower than the 5.8 percent growth in 2015, as a result of slower
Medicaid and prescription drug spending growth. In 2017, total health
spending is projected to grow by 5.4 percent, led by increases in private health
insurance spending. National health expenditure growth is projected to be
faster and average 5.8 percent for 2018-2025 largely due to expected
faster spending growth in both Medicare and Medicaid.
Medicare spending growth is projected to have been 5.0
percent in 2016 and is expected to average 7.1 percent over the full
projection period 2016-2025. Faster expected growth after 2016 primarily
reflects utilization of Medicare covered services increasing to approach
rates closer to Medicare’s longer historical experience. This results in
Medicare spending per beneficiary growth of 4.1 percent over 2016-2025
(compared to 1.6 percent growth for 2010-2015).
health insurance: Spending growth is projected to have slowed from 7.2
percent in 2015 to 5.9 percent in 2016, a trend that is related to slower
growth in private health insurance enrollment. Spending growth is
projected to increase to 6.5 percent in 2017, due in part to faster
premium growth in Marketplace plans related to previous underpricing of
premiums and the end of the temporary risk corridors.
Projected spending growth slowed significantly in 2016
to 3.7 percent, down from 9.7 percent in 2015, largely reflecting slower
growth in Medicaid enrollment. Spending growth is expected to accelerate
and average 5.7 percent for 2017-2025 as projected per-enrollee spending
growth rises over that timeframe. Underlying the faster per enrollee
growth is the increasingly larger share of the Medicaid population who are
aged and disabled and who tend to use more intensive services.
price inflation: Medical
prices are expected to increase more rapidly after historically low growth
in 2015 of 0.8 percent to nearly 3 percent by 2025. This faster projected
growth in prices is influenced by an acceleration in both economy-wide
prices and medical specific prices and is projected to be partially offset
by slowing growth in the use and intensity of medical goods and services.
drug spending: Drug spending growth is projected to have been 5.0
percent in 2016, following growth of 9.0 percent in 2015, mainly due to
slowing use of expensive drugs that treat Hepatitis C. Growth is projected
to average 6.4 percent per year for 2017-2025, influenced by higher
spending on expensive specialty drugs.
- Insured Share of the Population: The proportion of the population with health insurance is projected to increase from 90.9 percent in 2015 to 91.5 percent in 2025.