February 28, 2018
Spending for healthcare in the United States is projected to jump 5.3% this year, according to the Centers for Medicare and Medicaid Services (CMS). The increase is a sharp uptick from 2017 spending, which climbed 4.6% to nearly $3.5 trillion.
CMS attributes 2018’s increase to aging Baby Boomers, who are inflating enrollment in the Medicare health insurance program for the elderly and disabled, and a climb in the prices of medical goods and services and more disposable personal income. Prescription drugs and higher spending in Medicare and Medicaid are also expected to contribute significantly to rising health spending.
CMS projected that healthcare spending will rise an average of 5.5% annually from 2017 to 2026, and will comprise 19.7% of the U.S. economy in 2026, up from 17.9% in 2016. By 2026, health spending is projected to reach $5.7 trillion.
The CMS report also predicted a slightly higher share of the population will be uninsured in 2026. The insured rate is expected to drop to 89.3% from 91.1% in 2016, due almost entirely to the Trump administration’s regulatory actions related to the Affordable Care Act, which removed the individual mandate that required Americans to purchase healthcare insurance or pay a fine, and a rise in premiums in individual insurance markets.
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