HHS predicts national health spending to top $10k a person in 2016

National health spending will average more than $10,000 a person this year for the first time, the Obama administration said last week, a milestone that heralds somewhat faster growth in health spending after several years of exceptionally low growth (Source: “National Health Spending to Surpass $10,000 a Person in 2016,” New York Times, July 15, 2016).

By 2025, the administration reported, health care will represent 20 percent of the total economy, up from 17.8 percent last year. By 2025, one of every five Americans will be on Medicare, and the program will spend an average of nearly $18,000 a year for each beneficiary. Medicare spent about $12,000 per beneficiary in 2015.

The administration, in a report published in the journal Health Affairs, predicts that the pace of health spending will pick up in the coming decade, driven by improvements in the economy, higher medical prices and the aging of the people born from 1946 to 1964.

From 2015 to 2025, health spending is expected to grow an average of 5.8 percent a year — 1.3 percentage points faster than the economy, measured by the gross domestic product. The numbers are not adjusted for inflation.

By 2025, the report says, Medicaid is expected to spend an average of nearly $12,500 a year for each beneficiary, up from about $8,000 in 2015, and spending by private insurers is expected to average almost $8,600 for each person covered. Private insurers spent $5,400 per insured last year.