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Who Health Spending Increases Hit the Hardest

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Overall national health expenditures increased only about 4.6% between 2017 and 2018, to $3.6 trillion, but some payers had stretch harder to pay for health care than others.

(Related: Insurers Keep Their Share of US Health Spending)

A team of analysts at the Centers for Medicare and Medicaid Services (CMS) has published figures on how hard the health expenditure increases hit different types of payers in a new batch of 2018 national health expenditures data.

For a look at who got off relatively lightly, and who got walloped, see the data cards in the slideshow above. (Wiggle your pointer over the slideshow box to make the control arrows show up.)

The overall U.S. rate of spending on health care was up from 3.9%, but growth in U.S. “gross domestic product,” or national income, increased to 5.4%, from 4.2%, pushing total GDP close to $21 trillion.

Because GDP growth was so strong, health spending amounted to just 17.7% of GDP in 2018, down fromfrom 17.9% in 2017.

Private Health Insurers

Private health insurers increased their portion of national health spending 5.8%, to about $1.2 trillion.

The “net cost of private health insurance,” or the amount left over for items such as administration costs, shareholder profits and agent commissions, increased 15%, to $164 billion.

Much of the net cost of insurance increase appears to be due to federal government policy changes that cut spending on the Affordable Care Act cost-sharing reduction subsidy program and shifted the spending into the ACA premium tax credit subsidy program. That decision appears to have helped increase the amount of private health insurance revenue included in the net cost of insurance total to $51 billion in 2018, from $41 billion the year before.

Other Spending Categories

Overall increases in most other health spending categories were also modest: Spending on every major category increased at a rate of 5.2% or less.

Spending on prescription drugs, for example, increased just 2.5%, to $335 billion.

Here’s what happened to spending in some other categories:

  • Hospital care: $1.2 billion. (Up 4.5%)
  • Physician and clinical services: $726 billion (Up 4.1%)
  • Nursing home care: $169 billion (Up 1.4%)
  • Dental Services: $136 billion (Up 4.6%)
  • Home health care: $102 billion (Up 5.2%)
  • Basic medical research: $53 billion (Up 5%)


The CMS national health expenditures tables are available here.

—Read 3 New Facts About Private U.S. Health Spending,  on ThinkAdvisor.

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