As More People Sign Up for Health Insurance, America’s Health-Care Costs Go Up - Pacific Standard

As More People Sign Up for Health Insurance, America’s Health-Care Costs Go Up

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Prescription drug costs also grew.

By Francie Diep

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(Photo: Joe Raedle/Getty Images)

Health-care spending in the United States totaled $3.2 trillion last year, or nearly $10,000 per person, according to newly released government figures. That’s an uptick of almost 6 percent — sizable compared to the Great Recession years, but still lower than or on par with cost increases in the early 2000s.

Researchers attribute the rise, which occurred in 2014 as well, to the fact that the Affordable Care Act was finally fully implemented across the country, and with it came more people with health insurance and, consequently, more trips to the hospital and doctor’s office. Fifteen million Americans gained health insurance between 2013 and 2015.

“In 2014 and 2015, we have the one-time effects of the ACA expansion,” Aaron Catlin, deputy director of the Centers for Medicare and Medicaid Services’ National Health Statistics Group, said during a call for reporters.

Yet previous research from the Centers for Medicare and Medicaid Services had suggested this won’t be a one-time thing. Based on existing health-care laws — which the upcoming Trump administration has promised to change — researchers predicted health spending would grow over the next decade by an average of about 6 percent per year and would eventually make up a little more than one-fifth of America’s economy. In 2015, health-care spending accounted for 17.8 percent of America’s gross domestic product. In 1980, it was 9 percent.

In 2015, health-care spending accounted for 17.8 percent of America’s gross domestic product.

So who is spending so much more for health care than they had before? One hard-hit payer was the federal government, which spent nearly 10 percent more on Medicaid—totaling $545 billion—than in years past. Private health insurance companies saw their costs go up too, as a result of more people having access to benefits. In addition, some research suggests those newly insured after the passage of the ACA tended to be sicker and thus costlier for insurance companies than the average insured American prior to Obamacare.

Prescription drug costs also grew significantly, by 9 percent, during 2015. There were new, pricey medicines released last year, including a $1,100-a-day hepatitis C drug that vastly improved patients’ quality of life. The year 2015 also saw some companies hike the prices of their existing brand-name drugs, and was notable for its lack of patent expirations on blockbuster drugs—something that brought health-care costs down in the early 2010s with brand names like Lipitor and Plavix.

The debate that will now follow is whether this spending growth would have been even higher without Obamacare.

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