U.S. health spending in 2015 rose at fastest rate since 2007

[December 05, 2016]  By Toni Clarke

(Reuters) - U.S. health spending in 2015 rose at its fastest rate since 2007, driven by expanded access to insurance under the Affordable Care Act and high-priced specialty drugs, according to government figures released on Friday.

Growth rose 5.8 percent to $3.2 trillion, or $9,990 per person, according to federal data published in the independent journal Health Affairs and compiled into a report by officials with the Centers for Medicare and Medicaid Services.

After five years of historically low growth between 2009 and 2013, spending picked up in 2014 and 2015 as the Affordable Care Act - sometimes referred to as Obamacare - expanded health insurance coverage through marketplace insurance plans and Medicaid, the report said.

Over the two-year period between 2013 and 2015 the number of people with private health insurance rose 2.5 percent on average to 9.7 million. The number of people who enrolled in Medicaid rose on average 8.4 percent to 10.3 million.

"The health sector experienced dramatic changes in 2014 and 2015, as the main coverage provisions of the ACA were implemented," according to the report. "Over those two years the insured share of the population increased 4.9 percentage points and reached 90.9 percent."

For the first time the federal government became the largest sponsor of healthcare, the report said. Its share of health spending rose to 29 percent in 2015 from 28 percent in 2014 and 26 percent in 2013.

"Federal health spending growth in 2015 remained high mainly because of the continuation of enrollment increases in Medicaid, as newly eligible adults are fully financed by the federal government," the report said. "Federal Medicaid payments, which accounted for 37 percent of total federal health spending, increased 12.6 percent in 2015."

Healthcare spending as a percentage of gross domestic product rose to 17.8 percent from 17.2 percent, driven by increases in the use of healthcare services and the high cost of prescription drugs such as Gilead Sciences Inc's <GILD.O> hepatitis C drugs Sovaldi and Harvoni which in 2015 generated combined sales of nearly $20 billion.

Spending for private health insurance rose 7.2 percent in 2015 to $1.1 trillion, accounting for a third of the total. Medicare spending rose 4.5 percent to $646.2 billion, or 20 percent of the total, and Medicaid spending rose 9.7 percent to $545.1 billion, or 17 percent of the total.

(Reporting by Toni Clarke in Washington; Editing by Matthew Lewis)

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