Dec 6, 2019

Health care spending grew again in 2018 thanks to higher prices

Data: Centers for Medicare & Medicaid Services' Office of the Actuary; Chart: Axios Visuals

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.

Go deeper: Democrats double down on health care prices

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Health care spending grew at a faster rate in 2018

Data: Centers for Medicare & Medicaid Services' Office of the Actuary; Chart: Axios Visuals

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.

Go deeperArrowDec 5, 2019

Health care profits are soaring

Illustration: Sarah Grillo/Axios

Soaring health care costs are bad news for patients and taxpayers, but great news for the very profitable health care industry.

The big picture: The sector has profited heavily in 2019. Expect more of the same in 2020.

Go deeperArrowDec 7, 2019

Republican satisfaction with health care costs surges under Trump

A new Gallup survey shows that Republicans have gotten a whole lot happier about the cost of health care since President Trump took office, while Democrats' satisfaction has plummeted.

Our thought bubble: There is very little reason for anyone to be satisfied with the cost of health care in the U.S. — and that has been true for a very long time.

Go deeperArrowDec 12, 2019