Health Care To Make Up 20 Percent Of Economy By 2025


In 2016, national health care spending has averaged $10,000 a person. This milestone marks an upward trend of government spending on health care. At this rate, by 2025, health care will be 20 percent of the entire economy. 

In a report published on July 13 in the journal of Health Affairs, the Department of Health and Human Services (DHHS) projects that health care spending will continue to gain momentum in the upcoming decade with improvements in the economy, increased medical prices, and the aging of those born from 1946 to 1964, according to The New York Times. By 2025, one in five Americans will be on Medicare, and the program itself will likely spend around $18,000 per person. The amount spent per person is representative of the amount everyone pays into the health care system, which includes the patients themselves, the government and the private health care insurance companies. 

Within the next decade, health care spending is to increase by 5.8 percent per year. This figure is reportedly 1.3 percentage points faster than the economy itself, without adjusting for inflation.

"Health care spending is likely to accelerate in response to improvements in economic conditions that are projected over the coming decade," Sean P. Keehan, lead author of the report, said, according to The New York Times. With an improving economy, Keehan noted that citizens are more likely to have higher incomes and thus spend more on health care.

For average citizens, this means more out-of-pocket spending. According to U.S. News & World Report, out-of-pocket costs will hit $350.1 billion in 2016 and will rise to $555.8 billion over the next decade.

"We're anticipating cost-sharing will continue to increase, but we don't say what form that will take," Keehan told reporters, U.S. News & World Report notes. "We do anticipate employers will continue to shift costs onto their employees."

Part of the reason health care spending increased so rapidly -- to a total of $3.2 trillion in 2015 -- has to do with the expanded coverage under the Affordable Care Act, The New York Times notes. Millions of Americans are covered through either publicly funded programs like Medicaid or government-subsidized private insurance. The higher coverage means that "fewer people [are] reporting that they had skipped needed medical care because of cost concerns," according to the report.

These reports, according to U.S. News & World Report, could lend validation to critics of the Affordable Care Act who claim that the legislation is not reigning in health care spending as it was supposed to. Growth rates are still lower than the time prior to the Great Recession, but health care spending will continue to be a challenge, especially with the expected price increase of medical care.

" ... [T]oo many Americans still strain to pay for their physician visits and prescriptions, cover their deductibles or pay their monthly insurance bills," wrote President Barack Obama in a recent article published by JAMA, the American Medical Association's top journal, according to U.S. News & World Report.

Sources: The New York TimesU.S. News & World Report / Photo Credit: US Army Africa/Flickr

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