National healthcare spending growth is expected to outpace projected gross domestic product through 2026, according to a report from the CMS Office of the Actuary.
The report, published by Health Affairs, examines national healthcare spending trends and projections through 2026. For the report, the actuary office used a current-law framework to make projections. Projections include health provisions from Republicans' tax bill, which President Donald Trump signed into law in December. Projections assume continued Children's Health Insurance Program funding over the 10-year period, and don't take into account other health provisions from the two-year bipartisan budget deal reached in Congress earlier this month.
Here are 10 report findings.
1. The actuary office projects national healthcare spending growth will peak at $5.7 trillion in 2026. That takes into account an average 5.5 percent annual increase.
2. This growth is expected to outpace projected growth in GDP by 1 percent for 2017-26, according to the report. The actuary office projects the healthcare share of GDP will increase from 17.9 percent in 2016 to 19.7 percent by 2026 due to this trend.
3. The report also projects federal, state and local governments' financing of national healthcare spending will increase from 45 percent in 2016 to 47 percent by 2026.
4. Total 2017 national healthcare spending growth was projected at 4.6 percent, compared to 4.3 percent the year prior.
5. CMS attributed this growth to factors such as "accelerating growth in Medicare spending," "slightly faster growth in prices for healthcare goods and services," and "increases in premiums for insurance purchased through the [ACA] marketplaces."
6. The actuary office projected total 2018 national healthcare spending growth at 5.3 percent. CMS said this is partially due to personal healthcare prices, which are projected to reach 2.2 percent this year, compared to 1.4 percent in 2017.
7. Medicare annual spending growth is projected at 7.4 percent for 2017-26. The actuary office primarily attributed this to "enrollment growth and faster growth in utilization from recent near-historically low rates."
8. Medicaid annual spending growth is projected at 5.8 percent, on average, over the same time period — a slowdown compared to 2014-16 following major effects of Medicaid expansion.
9. Meanwhile, the actuary office projects private health insurance sending will average 4.7 percent over 2017-26, "reflecting low enrollment growth and downward pressure on utilization growth" influenced by factors such as the rise in popularity of high-deductible plans, as well as the repeal of the ACA's individual mandate penalty.
10. The actuary office projects personal healthcare spending growth will average 5.5 percent over the same time period, while prescription drug spending is projected to average 6.3 percent.
Read more findings here.