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CMS Office of the Actuary Releases 2016 National Health Expenditures

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In 2016, overall national health spending increased 4.3% following 5.8% growth in 2015, according to a study by the Office of the Actuary at CMS published as a Web First by Health Affairs.

Following the ACA coverage expansion and significant retail prescription drug spending growth in 2014 and 2015, health care spending growth decelerated in 2016. The report concludes that the 2016 expenditure slowdown was broadly based as growth for all major payers (private health insurance, Medicare and Medicaid) and goods and services categories (hospitals, physician and clinical services, and retail prescription drugs) slowed in 2016. During 2014 and 2015, the health spending share of the economy increased by 0.5 percentage points from 17.2% in 2013 to 17.7% in 2015.

The increases in the health spending share of the economy in 2014 and 2015 were largely due to coverage expansion that contributed to 8.7 million individuals’ gaining private health insurance coverage and 10.2 million gaining Medicaid coverage over the period and to significant growth in retail prescription drug spending. Health care spending grew 1.5 percentage points faster than the overall economy in 2016, resulting in a 0.2 percentage-point increase in the health spending share of the economy – from 17.7% in 2015 to 17.9% in 2016.

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