Gov’t says health costs to keep grow­ing faster than econ­omy

Daily Times (Primos, PA) - - BUSINESS -

WASHINGTON » U.S. health care spend­ing will keep grow­ing faster than the over­all econ­omy in the fore­see­able fu­ture, squeez­ing pub­lic in­sur­ance pro­grams and em­ploy­ers who pro­vide cov­er­age, the govern­ment said Wed­nes­day.

An­nual pro­jec­tions from num­ber crunch­ers at the Depart­ment of Health and Hu­man Ser­vices cite an aging pop­u­la­tion and an uptick in prices for health care ser­vices and goods as fac­tors be­hind the on­go­ing growth in costs.

Spend­ing is pro­jected to rise by an av­er­age of 5.5 per­cent an­nu­ally through 2026, or about 1 per­cent­age point faster than eco­nomic growth.

Pre­scrip­tion drugs ac­count for the fastest in­crease, 6.3 per­cent a year on av­er­age, due to the high cost of ad­vanced med­i­ca­tions.

Although Congress re­cently re­pealed the Af­ford­able Care Act’s re­quire­ment that most Amer­i­cans have health in­sur­ance, the share of peo­ple with cov­er­age is only ex­pected to dip slightly, hov­er­ing around 89 per­cent.

Medi­care spend­ing will in­crease as more baby boomers join the pro­gram. Costs per pa­tient are also ex­pected to rise, partly re­flect­ing an in­crease in the use of med­i­cal ser­vices.

The na­tion’s health care tab — es­ti­mated to reach nearly $3.7 tril­lion this year — would rise to nearly $5.7 tril­lion in 2026.

That would av­er­age out to more than $16,000 per per­son, although the sick­est pa­tients ac­count for most of the costs. In any given year, roughly half of health care spend­ing is on 5 per­cent of Amer­i­cans.

Health care would rep­re­sent nearly 20 per­cent of the econ­omy in 2026.

When health care costs grow faster than the over­all econ­omy, it makes it harder for govern­ment to pay for pro­grams like Medi­care and Med­i­caid, and for em­ploy­ers to keep fi­nanc­ing med­i­cal cov­er­age for work­ers and their fam­i­lies.

Still, ex­perts aren’t pre­dict­ing a re­turn to 7 per­cent yearly growth seen be­fore the 2007-09 “Great Re­ces­sion.”

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