Health care spending grew again in 2018 thanks to higher prices
Americans spent $3.65 trillion on health care in 2018 — 4.6% more than the year before. That growth also was higher than the 4.2% rate from 2017, according to revised figures from independent federal actuaries.
Between the lines: U.S. health care spending climbed again not because people went to the doctor or hospital more frequently, but because the industry charged higher prices. And private health insurers didn't do a particularly good job negotiating lower rates.
The intrigue: The number of people with private health plans — which mostly consists of the coverage people get through their jobs — dipped in 2018, yet the amount spent per person soared 6.7%.
- That is the highest per-enrollee spending growth rate among people with private health insurance since 2004, actuaries wrote.
- Part of that increase was due to higher premiums that insurance companies passed on from the Affordable Care Act's health insurance tax.
- More importantly: Hospitals, doctors and drugmakers continued to wring out much higher rates from private insurers thanks to provider mergers and perverse negotiating incentives.
Medicare and Medicaid had much lower per-enrollee spending growth rates in 2018 than private insurance, but those figures were the highest they've been since 2015 — again due to higher costs for the private insurers that are increasingly running those government programs.
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