WASHINGTON — The nation’s health care tab this year is expected to surpass an average of $10,000 per person for the first time, the government said Wednesday.
The report from the Department of Health and Human Services projects that health care spending will grow at a faster rate than the national economy over the coming decade. That squeezes the ability of federal and state governments, not to mention employers and average citizens, to pay.
Growth is projected to average 5.8 percent from 2015 to 2025, below the pace before the 2007-09 recession but faster than in recent years that saw health care spending moving in step with modest economic growth.
National health expenditures will hit $3.35 trillion this year, which works out to $10,345 for every man, woman and child. The annual increase of 4.8 percent for 2016 is lower than the forecast for the rest of the decade.
A stronger economy, faster growth in medical prices and an aging population are driving the trend. Medicare and Medicaid are expected to grow more rapidly than private insurance as the baby-boom generation ages. By 2025, government at all levels will account for nearly half of health care spending, 47 percent.
The report also projects that the share of Americans with health insurance will remain above 90 percent, assuming that President Obama’s health care law survives continued Republican attacks.
In this year’s presidential campaign, discussion of health care has been narrowly focused on the fate of Obama’s health care law. Republican Donald Trump vows to repeal “Obamacare,” while saying he won’t cut Medicare. Democrat Hillary Clinton has promised to expand government health care benefits. Both would authorize Medicare to negotiate prescription drug prices, which the report says will grow somewhat more slowly after recent sharp increases.
Obama’s health care law attempted to control costs by reducing Medicare payments to hospitals and insurers, as well as encouraging doctors to use teamwork to keep patients healthier. But it also increased costs by expanding coverage to millions who lacked it.
About 5 percent of the population – those most frail or ill – account for nearly half the spending in a given year, according to a separate government study.