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Health care spending to grow at current rate through 2015

MANAGED CARE March 2006. © MediMedia USA
Managed Care Outlook

Health care spending to grow at current rate through 2015

MANAGED CARE March 2006. ©MediMedia USA













From 2004 to 2015, health care spending is projected to remain relatively stable, with continued growth projected to be about 7.2 percent per year on average. Despite substantive revisions to the historical National Health Expenditures data (e.g., determining the value of structures and equipment in a medical professional's office) and a new model for private personal health care spending, aggregate growth calculated in this year's projection stands at a negligible 0.2 percentage points higher than last year's projection. In other words, for 2004–2014, the 2005 forecast is 0.2 percentage points higher than the 2004 forecast for the same period.

Overall, health care spending in the United States is projected to have grown 7.4 percent and surpassed $2 trillion in 2005, but that's down from the 7.9 percent growth experienced in 2004. This is the third year of slowing growth, following six years of acceleration from 1996 through 2002.

There has also been a slowdown in the growth of health insurance premiums — 6.8 percent in 2005, a deceleration of 1.6 percentage points from 2004. This trend is driven by the underwriting cycle and slower growth in projected medical benefits per enrollee.

The Office of the Actuary in the Centers for Medicare & Medicaid Services annually produces projections of health care spending for categories within the National Health Expenditure Accounts, which tracks health spending by source of funds and by type of service.

Source: Centers of Medicare & Medicaid Services, Office of the Actuary