US economy

Health Spending Grew Modestly, New Analysis Finds

In the race for the Democratic presidential nomination, some candidates have been pushing far broader plans to tackle the issue. Senators Bernie Sanders of Vermont and Elizabeth Warren of Massachusetts, have proposed establishing a single-payer health care system, where the government would provide generous taxpayer-funded insurance coverage for every American. Others, including former Vice President Joseph R. Biden and Mayor Pete Buttigieg, of South Bend, Ind., want to offer an optional government plan and more generous government subsidies for Americans who buy their own insurance.

However modestly it is growing, health spending in the United States is far higher than most other countries. The 2018 estimate of $3.6 trillion comes to more than $11,000 for every person in the country, with 33 percent going to hospital care, 20 percent to doctors and clinical services and 9 percent to retail prescription drugs. Measured as a percentage of gross domestic product, it is nearly double the average of health spending in other developed countries, according to the Organization for Economic Cooperation and Development. Most of those countries achieve lower health costs with universal coverage. In the United States, an estimated 28 million people are uninsured.

Given the public outrage over prescription drug prices, many people may be surprised to find that prices of prescription drugs bought at a pharmacy actually fell by one percent in 2018 for the first time since 1973, economists with the Centers for Medicare and Medicaid Services said in a telephone briefing about the new report. President Trump has seized on the slight drop, mentioning it in his rallies and speeches, although some experts warn the method the federal government uses for tracking drug price trends is imperfect.

Overall averages obscure a volatile mix of prices, with some drugs commanding escalating price tags, even as more common generic medications became less expensive.

The report also found that the share of the American population with health insurance fell for a second consecutive year in 2018, with most of the enrollment decline — 1.3 million people — coming in private coverage purchased directly, instead of through a job or the Affordable Care Act marketplace. The Trump administration has repeatedly highlighted this population as victims of rising premium costs under the Affordable Care Act; they generally earn too much to qualify for its premium subsidies.

There was also a slight drop in the number of people with employer-sponsored insurance and slower growth in Medicaid enrollment, although growth in Medicare enrollment remained steady.

Spending for people with private health insurance was $6,199 a person, an increase of 6.7 percent over 2017, the highest per-person growth rate since 2004. That number does not include out of pocket costs.


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