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In 2015, the amount that Americans are spending on health care is expected to grow 5.3 percent, and it is predicted to grow at an average of 5.8 percent per year through 2024. After five consecutive years of average spending growth of less than 4 percent annually, growth in national healthcare spending spiked to 5.5 percent in 2014. This trend has attracted the attention of both the federal government and state governments, which are projected to be paying approximately 47 percent of the nation’s health care bills by 2024.This increase is credited to a number of factors, including the revived economy, an aging Baby Boomer population, and expanded insurance coverage offered through the Affordable Care Act, according to a report published by the actuaries at the Centers for Medicare and Medicaid Services. In 2014, approximately 8.4 million people gained insurance coverage under the new health care law, which resulted in the use of more medical services and prescriptions. Prescription drug spending has also increased, as specialty drugs, such as those used to treat Hepatitis C, were introduced to the market; spending on pharmaceutical products jumped by 12.6 percent in 2014, up from a 2.5 percent increase in 2013.
While many working families are picking up part of the tab by paying a greater share of their own medical expenses, this continued increase in health care spending may soon outpace the nation’s overall economic growth, especially as Baby Boomers, who are now entering their 70s, place even more demands on the Medicare system. As the government looks to rein in growing costs, businesses will need to look at their own bottom lines as well as employee benefit programs.
